Cytochrome P45011A1, encoded by Cyp11a1, converts cholesterol to pregnenolone (P5), the first and rate-limiting step in steroidogenesis. In zebrafish, cyp11a1 is maternally expressed and cyp11a2 is considered the ortholog of Cyp11a1 in mammals. A recent study has shown that depletion of cyp11a2 resulted in steroidogenic deficiencies and the mutants developed into males with feminized secondary sexual characteristics. Here, we independently generated cyp11a2 mutants in zebrafish and showed that the mutants can develop into males and females in the juvenile stage, but finally into infertile males with defective mating behavior in the adult stage. In the developing ovaries, the cyp11a2 mutation led to stage I oocyte apoptosis and final sex reversal, which could be partially rescued by treatment with P5 but not estradiol. In the developing testes, depletion of cyp11a2 resulted in dysfunction of Sertoli cells and lack of functional Leydig cells. Spermatogonial stem cells (SSCs) in the mutant testes underwent active self-renewal but no differentiation, resulting in a high abundance of SSCs in the testis, as revealed by immunofluorescence staining with Nanos2 antibody. The high abundance and differentiation competence of SSCs in the mutant testes were verified by a novel testicular cell transplantation (TCT) method developed in this study, by transplanting mutant testicular cells into germline-depleted wild-type (WT) fish. The transplanted mutant SSCs efficiently differentiated into functional spermatids in WT hosts. Overall, our study demonstrates the functional importance of cyp11a2 in early oogenesis and differentiation of SSCs.