The testes are part of the male reproductive organs and are where the sperm is produced.
Spermatogenesis takes place at a lower temperature than regular body temperature which is why the testes are outside the body surrounded by a pouch of skin which is called the scrotum. This regulates the tempterature and keeps it at the optimum.
As well as producing sperm, the testes also produce hormones. Testosterone is produced in Leydig cells, which are active in fetal development leading to male charecteristics. However, after birth the cells will then remain inactive until puberty.