Sexual ambiguity can be a difficult and sometimes confusing diagnostic problem in children. Recent developments in molecular biology have provided the opportunity to analyze the gene responsible for testicular determination, SRY, the androgen receptor gene and the gene encoding the cP450 enzyme specific for 21-hydroxylation, CYP21B, whose defects are responsible for congenital adrenal hyperplasia. Southern-blotting studies and PCR analyses of SRY, androgen receptor and CYP21B genes can be routinely used for the direct diagnosis of gonadal dysgenesis, androgen insensitivity syndromes and congenital adrenal hyperplasia, respectively. In sex-reversed XY females, several de novo mutations or deletions in the SRY gene have been reported. Defects in the human androgen receptor cause a spectrum of defects in male phenotypic sexual development associated with abnormalities in the receptor protein. Analyses of the androgen receptor gene structure have identified the causative mutation in some families: mutations that result in large-scale alterations of the structure of the androgen receptor, mRNA or gene mutations that alter the primary structure of the androgen receptor protein and mutations that alter the level of mRNA. The diversity of clinical phenotypes, apparent in 21-hydroxylase deficiency, is paralleled by a considerable degree of mutational heterogeneity in the CYP21 gene locus. Various changes causing severe 21-hydroxylase deficiency have been reported: point mutations, gene conversions and gene deletions. In conclusion, substantial progress has been made elucidating genetic defects causing sex reversal in XY females, the androgen insensitivity syndrome and congenital adrenal hyperplasia. Molecular genetics can also be applied for carrier identification and prenatal diagnosis.