As the global issue of infertility continues to escalate, particularly with the increasing incidence of male infertility, research in testicular organoids offers new hope and strategies in this field. This review comprehensively discusses the application of testicular organoids in simulating the natural sperm-producing environment, delving into the mechanisms of spermatogenesis, and addressing challenges in male reproductive health. Firstly, we introduce the cellular composition, physiological functions, and the complete process of spermatogenesis within the testicular organ, emphasizing the crucial role of the testicular somatic cell microenvironment in normal testicular development and sperm production. Subsequently, we provide a comprehensive review of the construction of in vitro spermatogenesis systems and the associated research progress through techniques such as testicular tissue culture and reconstruction of testicular organoids in vivo. Moreover, testicular organoids, as a system mimicking spermatogenesis environments in vitro, exhibit significant potential in exploring molecular mechanisms, drug screening and toxicity assessment, as well as preserving and restoring male fertility. Finally, we discuss the limitations of current research in the field of testicular organoids and future research directions. Challenges include accurately simulating the physiological processes of the testis in vitro and improving the quality of sperm obtained in vitro for clinical applications. Future research directions involve delving into the complex interactions between germ cells and somatic cells, aiming to better simulate the testicular microenvironment in vitro, and striving towards safe and effective translation of these research findings into clinical applications for treating male infertility. Additionally, we should ensure that the genetic stability and functionality of germ cells cultured in vitro meet the requirements for clinical applications, and pay attention to the relevant ethical issues. Despite the complexity of the testicular microenvironment and the challenges in fully replicating human spermatogenesis in vitro, the ongoing development in the field of testicular organoids holds promise for providing novel solutions in clinical reproductive medicine and male health research.