Gonadal tissue obtained at about 50-day intervals from Days 60 to 300 of gestation was examined histologically, histochemically and in the electron microscope. The marked enlargement of the gonads (ovaries or testes) reached a peak around Day 250 and was caused by hypertrophy and hypoplasia of interstitial cells. These cells had all the ultrastructural characteristics of a steroid-secreting cell but delta5-3beta-hydroxysteroid dehydrogenase (3beta-HSD) was not detected at any stage of their development. There was no significant change in the ultrastructure of the interstitial cells between Days 100 and 250 except for a progressive increase in the number of dense bodies. By Day 300 the fetal gonads had begun to regress and degenerative changes were apparent in the interstitial cells. The possible mechanisms controlling the growth of the fetal gonads and their function in steroidogenesis is discussed.