Neurotrophin‐3 (NT‐3) acts as an important growth factor to stimulate and control tissue development. The NT‐3 receptor, TRKC, is expressed in rat testis. Its function in regulation of stem Leydig cell development and its underlying mechanism remain unknown. Here, we reported the role of NT‐3 to regulate stem Leydig cell development in vivo and in vitro. Ethane dimethane sulphonate was used to kill all Leydig cells in adult testis, and NT‐3 (10 and 100 ng/testis) was injected intratesticularly from the 14th day after ethane dimethane sulphonate injection for 14 days. NT‐3 significantly reduced serum testosterone levels at doses of 10 and 100 ng/testis without affecting serum luteinizing hormone and follicle‐stimulating hormone levels. NT‐3 increased CYP11A1‐positive Leydig cell number at 100 ng/testis and lowered Leydig cell size and cytoplasmic size at doses of 10 and 100 ng/testis. After adjustment by the Leydig cell number, NT‐3 significantly down‐regulated the expression of Leydig cell genes (Lhcgr, Scarb1, Star, Cyp11a1, Hsd3b1, Cyp17a1, Hsd17b3, Hsd11b1, Insl3, Trkc and Nr5a1) and the proteins. NT‐3 increased the phosphorylation of AKT1 and mTOR, decreased the phosphorylation of 4EBP, thereby increasing ATP5O. In vitro study showed that NT‐3 dose‐dependently stimulated EdU incorporation into stem Leydig cells and inhibited stem Leydig cell differentiation into Leydig cells, thus leading to lower medium testosterone levels and lower expression of Lhcgr, Scarb1, Trkc and Nr5a1 and their protein levels. NT‐3 antagonist Celitinib can antagonize NT‐3 action in vitro. In conclusion, the present study demonstrates that NT‐3 stimulates stem Leydig cell proliferation but blocks the differentiation via TRKC receptor.