Disruption of human fetal testis development is widely accepted to underlie testicular germ cell cancer (TGCC) origin and additional disorders within testicular dysgenesis syndrome (TDS). However, the mechanisms for the development of testicular dysgenesis in humans are unclear. We used ex vivo culture and xenograft approaches to investigate the importance of Nodal and Activin signaling in human fetal testis development. Inhibition of Nodal, and to some extent Activin, signaling disrupted seminiferous cord formation, abolished AMH expression, reduced androgen secretion, and decreased gonocyte numbers. Subsequent xenografting of testicular tissue rescued the disruptive effects on seminiferous cords and somatic cells but not germ cell effects. Stimulation of Nodal signaling increased the number of germ cells expressing pluripotency factors, and these persisted after xenografting. Our findings suggest a key role for Nodal signaling in the regulation of gonocyte differentiation and early human testis development with implications for the understanding of TGCC and TDS origin.