I completely agree with teenia's comment, I started talking to my son in the 3rd grade, first i would ask him what he knew about sex and then go from there, the younger you start the easier it is and that way it can be very gradual. I tried to not be real serious and laughed in between, it just made it easier. Just ask him what he know's and go from there. Good Luck!
Be honest! He obviously heard it somewhere and needs to be educated. He needs to know he can ask you questions. Kids are getting sexually active at younger ages. Educate your child so he can make intelligent choices.
I am not for sure what you should tell him, these days you do have to talk to your kids at an early age about sex because their are children having babies at 11-16 years of age, which is outrageous to me but true. My daughter is going to be 6 the end of this month and she asked me the other day how babies are born. I did not know what to say. Your son's doc office my have pamphlets on that topic to give you an idea about what to say or you could ask his doc what you should or could say if your son is asking questions.
What specifically is he asking? If he isn't asking anything, I don't think you need to tell him anything at all.