The molecules of hormones that are amino acid derivatives, peptides or proteins are. large and insoluble in lipids, and cannot enter the target cell. Therefore, they act at the cell surface. They bind to specific receptor molecules located on the surface of the cell membrane. On the other hand, steroid hormones like testosterone being hydrophobic molecules, diffuse freely into all cells and act within the cell. Thus they do not need cell membrane bound receptors, instead they have mobile receptor proteins in the cytoplasm.