Sex determination and differentiation is generalized with chromosomal sex during fertilization. At early stages, phenotypic sex does not match chromosomal sex—until later during intrauterine development, sexual maturation is reached. During intrauterine development, females change to male with the testes moving down from a blind vaginal pouch with a developing scrotum, as well as a penis which initially resembled a clitoris. What seems like a female phenotype is altered by increased testosterone levels secretion.

Mutations affecting the androgen receptor (AR) gene may cause either complete or partial androgen insensitivity syndrome. Androgen, a hormone used to describe a group of sex steroid hormones, is responsible for affecting male pseudohermaphroditism. The differentiation of the fetus as male takes place during the sixth or seventh week of gestation. The development is directed by the testicular determining factor: the gene SRY (sex determining region on Y chromosome). Throughout 9th to 13th week, the development of a male genitalia is dependent upon the conversion of testosterone to the more potent androgen by the action of 5α-reductase within the target tissues of the genitalia. A type of internal male pseudohermaphroditism is Persistent Müllerian duct syndrome, which is developed through synthesis of Müllerian-inhibiting factor defects. In such instances, duct derivatives are now in 46XY males—this includes the uterus, fallopian tubes, and upper vagina. These individuals with a hernia sac and bowel loops were found with duct derivatives as well as testes.

A study on a male pseudohermaphrodite kitten showed there was a combination of gastrointestinal and urogenital congenital abnormalities. It was confirmed to have type II atresia ani and rectovaginal fistula that is associated with male pseudohermaphroditism.

Approximately 1 in 20,000 individuals with a male appearance have 46,XX testicular disorder.

In about 80 percent of individuals with 46,XX testicular disorder of sex development, the condition results from an abnormal exchange of genetic material between chromosomes (translocation). This exchange occurs as a random event during the formation of sperm cells in the affected person's father. The translocation causes the SRY gene to be misplaced, almost always onto an X chromosome. If a fetus is conceived from a sperm cell with an X chromosome bearing the SRY gene, it will develop as a male despite not having a Y chromosome. This form of the condition is called SRY-positive 46,XX testicular disorder of sex development.

About 20 percent of those with 46 XX testicular disorder of sex development do not have the SRY gene. This form of the condition is called SRY-negative 46,XX testicular disorder of sex development. The cause of the disorder in these individuals is often unknown, although changes affecting other genes have been identified. Individuals with SRY-negative 46,XX testicular disorder of sex development are more likely to have ambiguous genitalia than are people with the SRY-positive form.

Individuals with CAIS are raised as females. They are born phenotypically female and almost always have a heterosexual female gender identity; the incidence of homosexuality in women with CAIS is thought to be less than unaffected women. However, at least two case studies have reported male gender identity in individuals with CAIS.

Gonadectomy at time of diagnosis is the current recommendation for PAIS if presenting with cryptorchidism, due to the high (50%) risk of germ cell malignancy. The risk of malignancy when testes are located intrascrotally is unknown; the current recommendation is to biopsy the testes at puberty, allowing investigation of at least 30 seminiferous tubules, with diagnosis preferably based on OCT3/4 immunohistochemistry, followed by regular examinations. Hormone replacement therapy is required after gonadectomy, and should be modulated over time to replicate the hormone levels naturally present in the body during the various stages of puberty. Artificially induced puberty results in the same, normal development of secondary sexual characteristics, growth spurt, and bone mineral accumulation. Women with PAIS may have a tendency towards bone mineralization deficiency, although this increase is thought to be less than is typically seen in CAIS, and is similarly managed.

The common pathway of sexual differentiation, where a productive human female has an XX chromosome pair, and a productive male has an XY pair, is relevant to the development of intersex conditions.

During fertilization, the sperm adds either an X (female) or a Y (male) chromosome to the X in the ovum. This determines the genetic sex of the embryo. During the first weeks of development, genetic male and female fetuses are "anatomically indistinguishable", with primitive gonads beginning to develop during approximately the sixth week of gestation. The gonads, in a "bipotential state", may develop into either testes (the male gonads) or ovaries (the female gonads), depending on the consequent events. Through the seventh week, genetically female and genetically male fetuses appear identical.

At around eight weeks of gestation, the gonads of an XY embryo differentiate into functional testes, secreting testosterone. Ovarian differentiation, for XX embryos, does not occur until approximately Week 12 of gestation. In normal female differentiation, the Müllerian duct system develops into the uterus, Fallopian tubes, and inner third of the vagina.

In males, the Müllerian duct-inhibiting hormone MIH causes this duct system to regress. Next, androgens cause the development of the Wolffian duct system, which develops into the vas deferens, seminal vesicles, and ejaculatory ducts.

By birth, the typical fetus has been completely "sexed" male or female, meaning that the genetic sex (XY-male or XX-female) corresponds with the phenotypical sex; that is to say, genetic sex corresponds with internal and external gonads, and external appearance of the genitals.

The condition affects only those with a Y-chromosome because dihydrotestosterone (DHT) has no known role in development of XX fetuses.

Challenges presented to people affected by this condition include: psychologically coming to terms with the condition, difficulties with sexual function, infertility. Long-term studies indicate that with appropriate medical and psychological treatment, women with CAIS can be satisfied with their sexual function and psychosexual development. CAIS women can lead active lives and expect a normal lifespan.

During embryogenesis, without any external influences for or against, the human reproductive system is intrinsically conditioned to give rise to a female reproductive organisation.

As a result, if a gonad cannot express its sexual identity via its hormones—as in gonadal dysgenesis—then the affected person, no matter whether their chromosomes are XY or XX, will develop external female genitalia. Internal female genitalia, primarily the uterus, may or may not be present depending on the cause of the disorder.

In both sexes, the commencement and progression of puberty require functional gonads that will work in harmony with the hypothalamic and pituitary glands to produce adequate hormones.

For this reason, in gonadal dysgenesis the accompanying hormonal failure also prevents the development of secondary sex characteristics in either sex, resulting in a sexually infantile female appearance and infertility.

Surgery is sometimes performed to alter the appearance of the genitals. However many surgeries performed on intersex people lack clear evidence of necessity, can be considered as mutilating, and are widely considered to be human rights violations when performed without the informed consent of the recipient.

5α-Reductase is an enzyme that converts testosterone to 5α-dihydrotestosterone (DHT) in peripheral tissues. These enzymes also participate in the creation of such neurosteroids as allopregnanolone and THDOC, convert progesterone into dihydroprogesterone (DHP), and convert deoxycorticosterone (DOC) into dihydrodeoxycorticosterone (DHDOC). 5-ARD is biochemically characterized by low to low-normal levels of testosterone and decreased levels of DHT, creating a higher testosterone/DHT ratio.

DHT is a potent androgen, and is necessary for the development of male external genitalia in utero.

The decision of whether to raise an individual with PAIS as a boy or a girl may not be obvious; grades 3 and 4 in particular present with a phenotype that may be difficult to classify as primarily male or female, and some will be incapable of virilization at puberty. Parents of an affected newborn should seek immediate help at a center with an experienced multidisciplinary team, and should avoid gender assignment beforehand. Gender assignment should thereafter be expeditiously decided; current guidelines advise against waiting for the child to decide for his / herself. Key considerations involved in assigning gender include the appearance of the genitalia, the extent to which the child can virilize at puberty, surgical options and the postoperative sexual function of the genitalia, genitoplasty complexity, potential for fertility, and the projected gender identity of the child. The majority of individuals with PAIS are raised male.

Virilization capacity can be assessed by measuring the response to a trial of exogenous androgens; some studies have measured the growth of the phallus in response to exogenous testosterone or dihydrotestosterone, while others have measured the change in sex hormone binding globulin (SHBG) in response to the artificial androgen stanozolol to assess androgen sensitivity. Some experts have cautioned that it remains to be proved that a good response to exogenous androgens in neonates is a good predictor of androgen response at puberty. If a mutation in the AR gene is found, it is important to determine whether the mutation is inherited or de novo (i.e. a somatic mutation); a certain amount of the wild-type androgen receptor will be present in cases of somatic mutation, which can induce virilization at puberty. A genital skin fibroblast study and a human chorionic gonadotropin (hCG) stimulation test may also provide information helpful in the assessment of virilization capacity.

Psychosexual development is influenced by many factors, including the timing, amount, and type of androgen exposure, receptor functionality, and environment, and is thus difficult to predict. Gender identity begins to develop before 3 years of age, although the earliest age at which it can be reliably assessed has yet to be determined. Approximately 25% of individuals with PAIS are dissatisfied with their assigned gender, regardless of being raised as male or female. One study reports that 46,XY individuals born with micropenis and no hypospadias are better off being raised male, despite the success of some being raised female. Studies involving the more ambiguous phenotypic forms of PAIS are less decisive. Homosexuality with respect to assigned gender and atypical gender role behavior are known to occur more frequently in individual with PAIS, and may occur with or without gender dysphoria; neither should be interpreted as an indication of incorrect gender assignment. If an affected child does express feelings of gender dysphoria, the opportunity to explore such feelings with a psychologist experienced in treating intersex conditions should be accommodated. If feelings of gender dysphoria persist, gender reassignment should be initiated, possibly with the aid of a specialist in the field.

Disorders of sex development (DSD), sometimes referred to as disorders of sex differentiation or differences of sex development, are medical conditions involving the reproductive system. More specifically, these terms refer to "congenital conditions in which development of chromosomal, gonadal, or anatomical sex is atypical."

The term has been controversial, and research has shown that affected people experience a negative impact, with the terminology impacting choice and utilization of health care providers. The World Health Organization and many medical journals still reference DSDs as intersex traits or conditions. The Council of Europe, and Inter-American Commission on Human Rights have called for a review of medical classifications that unnecessarily medicalize intersex traits.

Encountered karyotypes include 47XXY, 46XX/46XY, or 46XX/47XXY or XX & XY with SRY Mutations, Mixed Chromosomal abnormalities or hormone deficiency/excess disorders, and various degrees of mosaicism of these and a variety of others. The 3 Primary Karyotypes for True Hermaphroditism are XX with genetic defects (55-70% of cases), XX/XY (20-30% of cases) & XY (5-15% of cases) with the remainder being a variety of other Chromosomal abnormalities and Mosaicisms.

According to the UN Office of the High Commissioner for Human Rights:

In biological terms, sex may be determined by a number of factors present at birth, including:

- the number and type of sex chromosomes;

- the type of gonads—ovaries or testicles;

- the sex hormones;

- the internal reproductive anatomy (such as the uterus in females); and

- the external genitalia.

People whose characteristics are not either all typically male or all typically female at birth are intersex.

Some intersex traits are not always visible at birth; some babies may be born with ambiguous genitals, while others may have ambiguous internal organs (testes and ovaries). Others will not become aware that they are intersex unless they receive genetic testing, because it does not manifest in their phenotype.

Estimates for the incidence of androgen insensitivity syndrome are based on a relatively small population size, thus are known to be imprecise. CAIS is estimated to occur in one of every 20,400 46,XY births. A nationwide survey in the Netherlands based on patients with genetic confirmation of the diagnosis estimates that the minimal incidence of CAIS is one in 99,000. The incidence of PAIS is estimated to be one in 130,000. Due to its subtle presentation, MAIS is not typically investigated except in the case of male infertility, thus its true prevalence is unknown.

DSDs are medical conditions involving the way the reproductive system develops from infancy (and before birth) through young adulthood. There are several types of DSDs and their effect on the external and internal reproductive organs varies greatly.

A frequently-used social and medical adjective for people with DSDs is "intersex". Parents with DSD children and clinicians involved in DSD treatment usually try to make clear distinctions between biological sex, social gender, and sexual orientation. This helps reduce confusion about the differences between being intersex, being transgender, and being gay/lesbian.

The most common DSD is congenital adrenal hyperplasia (CAH), which results in a person with female (XX) chromosomes having genitals that look somewhat masculine. In mild cases CAH results in a slightly enlarged clitoris, while in more severe cases it can be difficult to decide (just by looking) whether a baby is male or female (this is called having ambiguous genitals). Nevertheless, if they are old enough to know the difference, most children with CAH think of themselves as girls. CAH is caused by a problem with the adrenal glands and is usually treated by taking a daily medication to replace or supplement the missing adrenal hormones. (When this adrenal problem occurs in people with male (XY) chromosomes, the result is over-masculinization and premature puberty).

Another common DSD is androgen insensitivity syndrome (AIS), which means that a person with male (XY) chromosomes does not respond to testosterone in the usual way. This results in a body that to some degree has a feminine appearance. In Complete Androgen Insensitivity Syndrome (CAIS) the result is a totally feminine appearance, including typical female breast development. Consequently, most young women with CAIS are unaware of their condition until the early teen years when they fail to menstruate. In the milder form, called Partial Androgen Insensitivity Syndrome (PAIS), the genitals can vary from mostly female to almost completely male. Some people with PAIS think of themselves as girls/women, others regard themselves as boys/men, and some consider themselves mixed-gender.

One of the more unusual DSDs is 5-alpha-reductase deficiency (5ARD). It is caused by a shortage early in life of an enzyme that activates testosterone. In this condition, a person with male (XY) chromosomes has a body that appears female before puberty. After puberty begins, other testosterone-activating enzymes become available and the body soon takes on a masculine appearance, with the scrotum and penis usually reaching typical or nearly-typical size. If 5ARD is diagnosed at a young age, the child is often raised as a boy (a 1996 Brazilian study suggested that the majority of adults with this condition consider themselves men but this has been questioned in some more recent research).

In addition to CAH, CAIS, PAIS, and 5ARD there are several rarer types of DSDs, and in some cases it is not possible to make a clear diagnosis of the underlying condition.

The penis and clitoris are essentially the same organ (differing only in size, and generically called the phallus). In typical males, the urethra is located at the tip of the penis, while in typical females the urethra is located below the base of the clitoris. When the phallus is of intermediate size, it is possible also to have a urethral opening located along the shaft; this condition is known as hypospadias.

Open-minded parenting, appropriate and conservative medical intervention, and age-appropriate child involvement in the treatment plan contribute greatly to successful outcomes for the entire range of DSDs.

All forms of androgen insensitivity are associated with infertility, though exceptions have been reported for both the mild and partial forms. Lifespan is not thought to be affected by AIS.

Androgen insensitivity syndrome (AIS) is an intersex condition in which there is a partial or complete inability of many cells in the affected genetic male to respond to androgenic hormones. This can prevent or impair the masculinization of male genitalia in the developing genetic male (chromosomal XY) fetus, as well as the development of male secondary sexual characteristics at puberty. Clinical phenotypes range from a normal male habitus with mild spermatogenic defect or reduced secondary terminal hair; to a full female habitus despite the presence of a Y-chromosome. Women (chromosomal XX) who are heterozygous for the AR gene have normal primary and secondary sexual characteristics; this female carrier will pass the affected AR gene to any child she has with 50% likelihood. AIS is the largest single entity that leads to 46,XY undermasculinized genitalia.

The androgen receptor (AR), which is defective due to a mutation in most of these syndromes, is a type of nuclear receptor that is activated by binding to either of the androgenic hormones (testosterone or dihydrotestosterone) in the cytoplasm, and then translocates into the nucleus where it binds to DNA, provided androgen response elements and coactivators are present. This combination functions as a transcription complex to turn on androgen gene expression. Thus the AR activates these genes to mediate the effects of androgens in the human body, including the development and maintenance of the male sexual phenotype and generalized anabolic effects. Over 400 AR mutations have been reported.

AIS is divided into three categories that are differentiated by the degree of genital masculinization: complete androgen insensitivity syndrome (CAIS) is indicated when the external genitalia are that of a normal female; mild androgen insensitivity syndrome (MAIS) is indicated when the external genitalia are that of a normal male, and partial androgen insensitivity syndrome (PAIS) is indicated when the external genitalia are partially, but not fully, masculinized.

Management of AIS is currently limited to symptomatic management; no method is currently available to correct the malfunctioning androgen receptor proteins produced by "AR" gene mutations. Areas of management include sex assignment, genitoplasty, gonadectomy in relation to tumor risk, hormone replacement therapy, genetic counseling, and psychological counseling.

There are no documented cases in which both types of gonadal tissue function.

Although fertility is possible in true hermaphrodites, there has yet to be a documented case where both gonadal tissues function, contrary to the misconception that hermaphrodites can impregnate themselves. As of 2010, there have been at least 11 reported cases of fertility in true hermaphrodite humans in the scientific literature, with one case of a person with XY-predominant (96%) mosaic giving birth.

The prevalence remains sparsely investigated. To date, two population-based nationwide studies have been conducted both estimating a prevalence about 1 in 5000 live female births. According to some reports, Queen Amalia of Greece may have had the syndrome, but a 2011 review of the historical evidence concludes that it is not possible to determine the inability of her and her husband to have a child. Her inability to provide an heir contributed to the overthrow of her husband, King Otto.

This condition will occur if there is an absence of both Müllerian inhibiting factor and testosterone. The absence of testosterone will result in regression of the Wolffian ducts; normal male internal reproductive tracts will not develop. The absence of Müllerian inhibiting factor will allow the Müllerian ducts to differentiate into the oviducts and uterus. In sum, this individual will possess female-like internal and external reproductive characteristics, lacking secondary sex characteristics. The genotype may be either 45,XO, 46,XX or 46,XY.

Nuclear receptor subfamily 5 group A member 1 (NR5A1), also known as SF1 or Ad4BP (MIM 184757), is located on the long arm of chromosome 9 (9q33.3). The NR5A1 is an orphan nuclear receptor that was first identified following the search for a common regulator of the cytochrome P450 steroid hydroxylase enzyme family. This receptor is a pivotal transcriptional regulator of an array of genes involved in reproduction, steroidogenesis and male sexual differentiation and also plays a crucial role in adrenal gland formation in both sexes. NR5A1 regulates the mullerian inhibitory substance by binding to a conserved upstream regulatory element and directly participates in the process of mammalian sex determination through mullerian duct regression. Targeted disruption of NR5A1 (Ftzf1) in mice results in gonadal and adrenal agenesis, persistence of Mullerian structures and abnormalities of the hypothalamus and pituitary gonadotropes. Heterozygous animals demonstrate a milder phenotype including an impaired adrenal stress response and reduced testicular size. In humans, NR5A1 mutations were first described in patients with 46, XY karyotype and disorders of sex development (DSD), Mullerian structures and primary adrenal failure (MIM 612965). After that, heterozygous NR5A1 mutations were described in seven patients showing 46, XY karyotype and ambiguous genitalia, gonadal dysgenesis, but no adrenal insufficiency. Since then, studies have confirmed that mutations in NR5A1 in patients with 46, XY karyotype cause severe underandrogenisation, but no adrenal insufficiency, establishing dynamic and dosage-dependent actions for NR5A1. Subsequent studies revealed that NR5A1 heterozygous mutations cause primary ovarian insufficiency (MIM 612964).

The androgen receptor gene contains two polymorphic trinucleotide microsatellites in exon 1. The first microsatellite (nearest the 5' end) contains 8 to 60 repetitions of the glutamine codon "CAG" and is thus known as the polyglutamine tract. The second microsatellite contains 4 to 31 repetitions of the glycine codon "GGC" and is known as the polyglycine tract. The average number of repetitions varies by ethnicity, with Caucasians exhibiting an average of 21 CAG repeats, and Blacks 18. Disease states are associated with extremes in polyglutamine tract length; prostate cancer, hepatocellular carcinoma, and mental retardation are associated with too few repetitions, while spinal and bulbar muscular atrophy (SBMA) is associated with a CAG repetition length of 40 or more. Some studies indicate that the length of the polyglutamine tract is inversely correlated with transcriptional activity in the AR protein, and that longer polyglutamine tracts may be associated with infertility and undermasculinized genitalia. However, other studies have indicated that no such correlation exists. A comprehensive meta-analysis of the subject published in 2007 supports the existence of the correlation, and concluded that these discrepancies could be resolved when sample size and study design are taken into account. Longer polyglycine tract lengths have also been associated with genital masculinization defects in some, but not all, studies.

The degree to which individuals with XX male syndrome develop the male phenotype is variable, even among SRY-positive individuals. A completely male phenotype usually develops in the presence of the SRY gene but, in some cases, the presence of the SRY gene can result in internal and/or external genitalia ambiguities. Normal XX females undergo X inactivation during which one copy of the X chromosome is silenced. It is thought that X inactivation in XX males may account for the genital ambiguities and incomplete masculinization seen in SRY-positive XX males. The X chromosome with the SRY gene is preferentially chosen to be the active X chromosome 90% of the time, which is why a complete male phenotype is often seen in SRY-positive XX males. In the remaining 10%, X inactivation spreads to include a portion of the SRY gene, resulting in incomplete masculinization.

Masculinization of SRY-negative XX males is dependent upon which genes have mutations and at what point in development these mutations occur.