The invention discloses a method for differentiating inducible pluripotent stem cells into testicular interstitial cells by small molecule induction. The method comprises the following steps: firstly,obtaining human inducible pluripotent stem cells; secondly, carrying out pretreatment culture on the human inducible pluripotent stem cells by using an E7 culture medium without basic fibroblast growth factors; thirdly, inducing the human inducible pluripotent stem cells to differentiate by using a differential medium and combining with a small molecule inducer, wherein the small molecule inducercomprises a DHH agonist SAG, 22R-OHC, lithium chloride, human platelet-derived growth factor AA, fibroblast growth factor 2, insulin-like growth factor 1, androgen, luteinizing hormone, retinol and 8-bromo-cyclic adenosine monophosphate; fourthly, manually removing clonal cluster-like parenchyma cells; fifthly, continuously culturing the remaining cells after the parenchyma cells are removed by using an enriched medium, replacing the enrichment medium regularly, and finally obtaining the target testicular interstitial cells.