Aromatase activity in fetal rat testes and ovaries was demonstrated by the conversion of tritiated testosterone or 19-hydroxyandrostenedione into estrone and estradiol, which were identified and quantified by double isotopic dilution and recrystallization to constant specific activity. Testes formed mostly estradiol, ovaries mostly estrone. Aromatase activity was stimulated by cAMP in both the testes and ovaries as early as 17 days of fetal life. Stimulation by FSH was noted at this same stage in the testis, but not before 3-4 days after birth in the ovary. LH was without effect on aromatase activity in both kinds of gonads. Basal estrogen secretion was non-existent or undetectable in both the testes and ovaries in fetal stages. In the presence of cAMP and as early as 17 days of fetal life, the testes released estradiol, as early as 14 days the ovaries released estrone. Estrogen secretion was stimulated by LH and FSH at fetal stages in the testis and at infantile stages in the ovary. Responsiveness to gonadotrophins closely followed the appearance of the receptors.