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Insulin-like 3 peptide (INSL3) is a member of the insulin-like peptide superfamily and is the only known physiological ligand of relaxin family peptide receptor 2 (RXFP2), a G protein-coupled receptor (GPCR). In mammals, INSL3 is primarily produced both in testicular Leydig cells and in ovarian theca cells, but circulating levels of the hormone are much higher in males than in females. The INSL3/RXFP2 system has an essential role in the development of the gubernaculum for the initial transabdominal descent of the testis and in maintaining proper reproductive health in men. Although its function in female physiology has been less well-characterized, it was reported that INSL3 deletion affects antral follicle development during the follicular phase of the menstrual cycle and uterus function. Since the discovery of its role in the reproductive system, the study of INSL3/RXFP2 has expanded to others organs, such as skeletal muscle, bone, kidney, thyroid, brain, and eye. This review aims to summarize the various advances in understanding the physiological function of this ligand-receptor pair since its first discovery and elucidate its future therapeutic potential in the management of various diseases.