This discussion reviews, partially from the historical perspective of the author, the development and evolution of the concept of the sexual differentiation of the brain, a process that has profound implications for reproductive biology, animal behavior and developmental neurobiology. Although there are numerous sex differences in brain function, the mammalian brain appears to be fundamentally female. Characteristics of brain function typical of the male sex are imposed on the developing brain by the action of testicular hormones. In fact, estradiol produced intraneuronally by the aromatization of testicular testosterone, appears to be the hormonal molecule responsible for the masculine differentiation of the brain. Much of the research in this area has been descriptive in nature, and studies of the possible mechanisms of hormone action have been limited to very general approaches because of the complexities of the process and the lack of specific model systems. Recently, marked structural correlates of sexual differentiation have been identified. The sexually dimorphic nucleus of the preoptic area (SDN-POA), for example, is now viewed as a morphological signature of the action of gonadal hormones on the developing brain and has become a model system to investigate the fundamental mechanism(s) by which hormones act to determine the structure and functional capacity of the brain. Although possible effects of estradiol on neurogenesis and(or) neuronal migration cannot be excluded, it currently appears that one mechanism of the sexual differentiation of the brain is the hormonal promotion of neuronal survival during a developmental phase of neuronal death. The discovery of the SDN-POA in the rat emphasizes the value of the comparative approach to sexual differentiation. It is likely that other animal species may prove to be species of choice for future investigations of components of the complex process of the sexual differentiation of the brain.