In most mammals, the sex of the gonads is based on the fate of the supporting cell lineages, which arises from the proliferation of coelomic epithelium (CE) that surfaces on the bipotential genital ridge in both XY and XX embryos. Recent genetic studies and single-cell transcriptome analyses in mice have revealed the cellular and molecular events in the two-wave proliferation of the CE that produce the supporting cells. This proliferation contributes to the formation of the primary sex cords in the medullary region of both the testis and the ovary at the early phase of gonadal sex differentiation, as well as to that of the secondary sex cords in the cortical region of the ovary at the perinatal stage. To support gametogenesis, the testis forms seminiferous tubules in the medullary region, whereas the ovary forms follicles mainly in the cortical region. The medullary region in the ovary exhibits morphological and functional diversity among mammalian species that ranges from ovary-like to testis-like characteristics. This review focuses on the mechanism of gonadal sex differentiation along the cortical-medullary axis and compares the features of the cortical and medullary regions of the ovary in mammalian species.