The aim of this study was to estimate the heritability of variation in testosterone levels in 12-year-old children, and to explore the overlap in genetic and environmental influences on circulating testosterone levels and androgen-dependent pubertal development. Midday salivary testosterone samples were collected on 2 consecutive days in a sample of 183 unselected twin pairs. Androgen-induced pubertal development was assessed using self-report Tanner scales of pubic hair development (boys and girls) and genital development (boys). A significant contribution of genetic effects to the variance in testosterone levels was found. Heritability was approximately 50% in both boys and girls. The remaining proportion of the variance in testosterone levels could be explained by nonshared environmental influences. The relatively high correlation between testosterone levels of opposite-sex dizygotic twins suggests that sex differences in genes influencing variation in testosterone levels have not yet developed in pre- and early puberty. Variance in pubertal development was explained by a large genetic component, moderate shared environmental influences, and a small nonshared environmental effect. Testosterone levels correlated moderately (r = .31) with pubertal development; the covariance between testosterone levels and pubertal development was entirely accounted for by genetic influences.