Abstract Background Testicular adrenal rest tumors (TART) are a common complication of unknown cellular origin in patients with congenital adrenal hyperplasia (CAH). These benign tumors have both adrenal and testicular characteristics and are hypothesized to either derive from cells of adrenal origin from the fetal adrenogonadal primordium or by atypical differentiation of adult Leydig-progenitor cells. Objective This study aims to unravel the identity and etiology of TART. Methods Co-expression of adrenal-specific CYP11B1 and Leydig cell-specific HSD17B3 in TART was studied using immunohistochemistry. We studied the possibility of TART being derived from atypical differentiation of adult Leydig-progenitor cells by the quantification of adrenal-specific enzyme expression upon adrenocorticotrophic hormone (ACTH)-like stimulation of ex vivo cultured platelet-derived growth factor receptor alpha-positive cells. By comparing the transcriptome of TART (n = 16) with the transcriptome of fetal adrenal (n = 13), fetal testis (n = 5), adult adrenal (n = 11), and adult testis (n = 10) tissues, we explored the identity of TART. Results We demonstrate co-expression of adrenal-specific CYP11B1 and testis-specific HSD17B3 in TART cells, indicating the existence of a distinct TART cell exhibiting both adrenal and testicular characteristics. Ex vivo cultured adult Leydig-progenitor cells did not express the ACTH-receptor MC2R but did express CYP11B1 upon stimulation. Unsupervised clustering of transcriptome data showed that TART was most similar to adult adrenal tissue, followed by adult testis tissue, and least similar to either fetal tissue. Conclusion Our data suggest that TART is induced — most likely via activation of a cAMP/protein kinase A-dependent receptor — from a progenitor cell into a unique mature adrenal-like cell type, sometimes exhibiting both adrenal and testicular features.