Human sexual differentiation is a critical process whereby a strict dimorphism is established that enables future reproductive success as phenotypic males and females. Significant components of this differentiation pathway unfold during the first three months of gestation when they are sensitive to disruption by abnormal hormonal influences. Excessive exposure of female development to androgens in conditions such as congenital adrenal hyperplasia causes virilization. However, recently we have suggested that female development normally takes place in the presence of low, yet significant, levels of androgen, implying a need for strict regulation to avoid virilization and the potential for a biological role of androgens in females that has not been fully elucidated. Here, we review androgen-dependent male differentiation of the external genitalia in humans, and link this to current understanding of female development and steroidogenesis in the developing adrenal cortex.