During fetal development of subprimate mammals, sexual differentiation of the genitals and of specific sex-dimorphic brain systems depends on androgens; corresponding sex differences are displayed in prepubertal behaviours as well as in behaviours that depend on activation by pubertal hormones. In human beings, fetal hormones play the same role in genital differentiation. Hormone-dependent structural brain changes are also very likely but have not yet been demonstrated. The corresponding effects of fetal hormones on childhood behaviour have been found both in subhuman primates and in man, while the evidence concerning later behaviour, including sexual orientation, is not yet clear. The development of gender identity in humans is a cognitive process that has no counterpart in animal behaviour and is unlikely to be based on a specific hormone-sensitive brain system. It appears that the hormone-dependent variations of sex-dimorphic behaviour in childhood can be accommodated within either gender identity, provided that the child's physical appearance is gender adequate and the parental (or other caregivers') rearing style does not interfere with typical gender role development. In intersex individuals, changes in gender identity seem to occur primarily when genital and/or general physical appearance are in conflict with the assigned gender and/or when rearing has been ambiguous. The available descriptions of such changes do not seem compatible with a primarily neuroendocrine explanation. Thus, decisions on sex assignment and reassignment of intersex patients need to be based on expected social and sexual functioning, and the clinical management of such patients must minimize the risk of ambiguous rearing and of the development of a gender-incongruent physical appearance. The development of a sexual orientation in humans as hetero- or homosexual does not seem to depend on pubertal hormones. The evidence for a role of fetal hormones is suggestive, but the issue is not yet settled. Attempts to implicate the H-Y antigen in the aetiology of transsexuality seem to have failed; psychoendocrine research here parallels that on sexual orientation. Some recent developments in the management of transsexual patients are discussed.