Binding sites of [3H]testosterone and [3H]dihydrotestosterone in the rat fetal urogenital sinus and postnatal prostate and vagina grown in vitro were examined by steroid autoradiography. Distinct nuclear incorporation of both androgens appeared between 14.5 and 16.5 days of gestation in rat fetuses. Nuclear labelling in the sinus was restricted to the mesenchyme surrounding the epithelium which showed no nuclear labelling. A similar distribution of labelled cells was observed in male and female sinuses up to 18.5 days of gestation. By 20.5 days of gestation, the labelling in the ventral mesenchyme of female urogenital sinuses became less intense but persisted in the mesenchyme of the dorsal sinus wall from which the vagina is formed. In the postnatal prostate, the epithelium showed nuclear [3H]testosterone labelling at 10 days coinciding with the onset of its functional differentiation. Epithelial labelling became more intensive at 4 weeks post partum while that of the mesenchyme declined. The results suggest two phases of androgen action: formation of the prostatic buds mediated by the androgen-activated mesenchyme of the fetal urogenital sinus and the differentiation of the postnatal prostatic epithelium directly stimulated by androgens.