The mammalian spermatozoon undergoes continuous modifications during spermatogenesis, maturation in the epididymis, and capacitation in the female reproductive tract. Only the capacitated spermatozoa are capable of binding the zona-intact egg and undergoing the acrosome reaction. The fertilization process is a net result of multiple molecular events which enable ejaculated spermatozoa to recognize and bind to the egg's extracellular coat, the zona pellucida (ZP). Sperm-egg interaction is a species-specific event which is initiated by the recognition and binding of complementary molecule(s) present on sperm plasma membrane (receptor) and the surface of the ZP (ligand). This is a carbohydrate-mediated event which initiates a signal transduction cascade resulting in the exocytosis of acrosomal contents. This step is believed to be a prerequisite which enables the acrosome reacted spermatozoa to penetrate the ZP and fertilize the egg. This review focuses on the formation and contents of the sperm acrosome as well as the mechanisms underlying the induction of the acrosome reaction. Special emphasis has been laid on the synthesis, processing, substrate specificity, and mechanism of action of the acid glycohydrolases present within the acrosome. The hydrolytic action of glycohydrolases and proteases released at the site of sperm-zona binding, along with the enhanced thrust generated by the hyperactivated beat pattern of the bound spermatozoon, are important factors regulating the penetration of ZP. We have discussed the most recent studies which have attempted to explain signal transduction pathways leading to the acrosomal exocytosis.