Dihydrotestosterone in androgen target tissues is formed under most circumstances by the 5alpha-reduction of testosterone, but an alternate pathway involves the oxidation of androstanediol to dihydrotestosterone. To investigate the mechanism by which androgens virilize the Wolffian ducts in the tammar wallaby, [(3)H]progesterone was incubated with testes from d 10 and 19 pouch young, and radioactivity was recovered in testosterone and androstanediol at both ages. Analysis of the intermediates indicates that androstanediol was formed both from testosterone via 5alpha-reduction and 3alpha-keto reduction and directly from 5alpha-reduced progestogens. 5alpha-Reductase activity was high in minces of mesonephros/epididymis from d 6-21 pouch young. When minces of urogenital tract tissues from d 19 pouch young were incubated with [(3)H]testosterone, [(3)H]dihydrotestosterone, and [(3)H]androstanediol, dihydrotestosterone was the principal androgen formed in the mesonephros/epididymis, urogenital sinus, and urogenital tubercle, whereas androstanediol was the principal androgen formed by the testis. In intact pouch young studied between d 10 and 34, administration of the 5alpha-reductase inhibitor, 17beta-(N,N-diethyl)carbamoyl-4-methyl-4-aza-5alpha-androstan-3-one, blocked virilization of the Wolffian ducts in males, and administration of androstanediol caused virilization of the Wolffian ducts in females. We conclude that dihydrotestosterone, largely formed in the tissue by the oxidation of androstanediol derived from the testes and also the 5alpha-reduction of testosterone, is responsible for Wolffian duct virilization in this species.