Spodoptera litura commonly known as the cutworm, is among the most destructive lepidopteran pests affecting over 120 plants species. The powerful destructive nature of this lepidopteran is attributable to its high reproductive capacity. The testicular fusion that occurs during metamorphosis from larvae to pupa in S.litura positively influences the reproductive success of the offspring. In contrast, Bombyx mori, the silkworm, retains separate testes throughout its life and does not undergo this fusion process. Microscopic examination reveals that during testicular fusion in S.litura, the peritoneal sheath becomes thinner and more translucent, whereas in B.mori, the analogous region thickens. The outer basement membrane in S.litura exhibits fractures, discontinuity, and uneven thickness accompanied by a significant presence of cellular secretions, large cell size, increased vesicles, liquid droplets, and a proliferation of rough endoplasmic reticulum and mitochondria. In contrast, the testicular peritoneal sheath of B.mori at comparable developmental stage exhibits minimal change. Comparative transcriptomic analysis of the testicular peritoneal sheath reveals a substantial difference in gene expression between the two species. The disparity in differential expressed genes (DEGs) is linked to an enrichment of numerous transcription factors, intracellular signaling pathways involving Ca2+ and GTPase, as well as intracellular protein transport and signaling pathways. Meanwhile, structural proteins including actin, chitin-binding proteins, membrane protein fractions, cell adhesion, extracellular matrix proteins are predominantly identified. Moreover, the study highlights the enrichment of endopeptidases, serine proteases, proteolytic enzymes and matrix metalloproteins, which may play a role in the degradation of the outer membrane. Five transcription factors-Slforkhead, Slproline, Slcyclic, Slsilk, and SlD-ETS were identified, and their expression pattern were confirmed by qRT-PCR. they are candidates for participating in the regulation of testicular fusion. Our findings underscore significant morphological and trancriptomic variation in the testicular peritoneal sheath of S.litura compared to the silkworm, with substantial changes at the transcriptomic level coinciding with testicular fusion. The research provides valuable clues for understanding the complex mechanisms underlying this unique phenomenon in insects.