The ATR-X (alpha thalassemia, mental retardation, X-linked) syndrome is a severe developmental disorder affecting males caused by mutations in the chromatin remodelling gene ATRX. 80% of patients display genital abnormalities which include hypospadias and ambiguous genitalia. These patients have poorly formed testes containing only a few scattered seminiferous tubules. Previously, we generated a mouse model for these testicular defects with Atrx specifically inactivated in the Sertoli cells of the testis (ScAtrxKO). ScAtrxKO mice developed small testes due to prolonged G2/M phase and apoptosis of proliferating Sertoli cells during fetal life. Here, we investigate further the mechanisms underlying these defects in ATRX-deficient Sertoli cells. We show that in wildtype Sertoli cells ATRX co-localizes with GATA4, DAXX and the heterochromatin protein HP1 in a single PML nuclear body (PML-NB). The presence of HP1 indicated that this PML-NB is associated with chromatin. Intriguingly, in ScAtrxKO mice, the size of these GATA4/PML-NBs was drastically increased while DAXX expression was reduced or lost. Chromosome condensation appeared to be affected at these giant PML-NBs based on the absence of PH3 protein staining at G2/M phase. In addition, in ATRX-deficient Sertoli cells, the PML-NBs were frequently associated with γH2AX, a marker of DNA double strand breaks. We propose that ATRX loss at PML-NBs in Sertoli cells leads to a failure in chromosome condensation with subsequent chromosome instability and chromosome breaks.