Using histology and immunohistochemical methods, the effects and action mechanism of estradiol-17 Mugil cephalus, were further investigated. Healthy male juvenile grey mullets were randomly divided into four groups: which were fed with estradiol-17 + Tamoxifen and basic diet(control), respectively, for 45 days, then all basic diet for 15days instead, could hasten cell division, spermatogenesis obviously. But the Tamoxifen group and the mixed group showed the arrest of development, cell necrosis and apoptosis of spermatogonia. Meanwhile, the morphology and quantity were changed in Sertoli’s cells after feeding 30 days, which further verified E₂ stimulated spermatogenesis by its receptor mediated.The Estrogen receptor(ER) localization in the early testis of grey mullet showed the immunoreactivity of ER was the highest in E₂ group, the control group took place secondly, the mixed group was the worst, and the Tam group showed immuno-negative. So, the immunohistochemical results futhur proved that E₂ played a crucial role on inducing spermatogenesis, when it was deficiency or affected seriously.