Leydig cells in fetal testes play crucial roles in masculinizing fetuses through androgen production. Gene knockout studies have revealed that growth factors are implicated in fetal Leydig cell (FLC) differentiation, but little is known about the mechanisms regulating this process. We investigated this issue by characterizing FLC progenitor cells using single-cell RNA sequencing. The sequence datasets suggested that thymosin β10 (Tmsb10) was transiently upregulated in the progenitors. While studying the function of Tmsb10, we revealed that platelet-derived growth factor (PDGF) regulated ciliogenesis through the RAS/ERK and PI3K/AKT pathways, and thereby promoted desert hedgehog (DHH)-dependent FLC differentiation. Tmsb10 expressed in the progenitor cells induced their differentiation into FLCs by suppressing the RAS/ERK pathway. Through characterizing the transiently expressed Tmsb10 in the FLC progenitors, this study unveiled the molecular process of FLC differentiation and showed that it is cooperatively induced by DHH and PDGF.