Diethylstilbestrol (DES) feminizes the embryonic chick testes and causes retention of the Mullerian duct, an observation made by Etienne Wolff in 1939. The present study was designed to determine if the feminized testis could produce Mullerian Inhibiting Substance (MIS). DES in various doses was injected into the air sac or yolk of 5-day chick embryos, with removal of the gonads at 13-16 days of incubation. That the DES-treated testis was feminized was documented by the development of a left "ovarian" cortex, yet this gonad continued to produce MIS as estimated by a graded organ-culture assay. The male chick Mullerian ducts, exposed to both endogenous MIS and exogenous estrogen (DES), however, were preserved, indicating that the Mullerian duct retention seen in DES-treated embryos was not caused by suppression of MIS secretion. These data support the hypothesis that MIS and estrogens interact at the target-organ (i.e., Mullerian duct), resulting in Mullerian duct retention. The implications of this hypothesis for mammalian sexual development especially in regard to the effect of DES-treatment on male fetuses, and the possible role of MIS and estrogens in testicular descent are considered.