The acquisition of a sexually dimorphic phenotype is a critical event in ma
mmalian development. The basic underlying principle of sexual development i
s that genetic sex-determined at fertilization by the presence or absence o
f the Y chromosome-directs the embryonic gonads to differentiate into eithe
r testes or ovaries. Thereafter, hormones produced by the testes direct the
developmental program that leads to male sexual differentiation. In the ab
sence of testicular hormones, the female pathway of sexual differentiation
occurs. Recent studies have defined key roles in gonadal development for tw
o transcription factors: Wilms' tumor suppressor 1 (WT1) and steroidogenic
factor 1 (SF-1). After presenting a brief overview of gonadal development a
nd sexual differentiation, this paper reviews the studies that led to the i
solation and characterization of WT1 and SF-1, and then discusses how inter
actions between these two genes may mediate their key roles in a common dev
elopmental pathway.