The first two weeks of life are a critical period for hippocampal development. At this time gonadal steroid exposure organizes sex differences in hippocampal sensitivity to activational effects of steroids, hippocampal cell morphology and hippocampus dependent behaviors. Our laboratory has characterized a robust sex difference in neonatal neurogenesis in the hippocampus that is mediated by estradiol. Here, we extend our knowledge of this sex difference by comparing the male and female hippocampus to the androgen insensitive testicular feminized mutant (Tfm) rat. In the neonatal Tfm rat hippocampus, fewer newly generated cells survive compared to males or females. This deficit in cell genesis is partially recovered with the potent androgen DHT, but is more completely recovered following estradiol administration. Tfm rats do not differ from males or females in the level of endogenous estradiol in the neonatal hippocampus, suggesting other mechanisms mediate a differential sensitivity to estradiol in male, female and Tfm hippocampus. We also demonstrate disrupted performance on a hippocampal-dependent contextual fear discrimination task. Tfm rats generalize fear across contexts, and do not exhibit significant loss of fear during extinction exposure. These results extend prior reports of exaggerated response to stress in Tfm rats, and following gonadectomy in normal male rats.