The maturation of spermatid to fertilization competent spermatozoa is a sophisticated process required for sexual reproduction, and biogenesis of the cytoplasmic droplet (CD) is a key event. Here we demonstrate that two proteins with testis-specific expression, ARRDC5 and TEX38, physically interact, are required for normal sperm maturation, and play a critical role in CD formation and function. In the CDs of the Arrdc5-/- or Tex38-/- mice, a key feature of saccular element biogenesis fails, the proteome is abnormal, and migration from the neck down the flagellum does not occur. Furthermore, comparative proteomic profiling between sperm CDs and spermatids from Arrdc5-/-, Tex38-/-, and wild-type mice suggests that ARRDC5 and TEX38 facilitate cargo loading during CD biogenesis and deposition of proteins such as TOMM40 from the CD to the sperm mitochondrial sheath during epididymal maturation. This protein delivery mechanism is likely a key event in enabling sperm motility and therefore fertilization capacity.