In order to study effects of nicotine on fetal gonadal axis and sexually dimorphic behavior, time-pregnant Sprague Dawley rats were implanted on gestational day (GD) 12 with an osmotic minipump containing either nicotine tartrate, tartaric acid or saline. Others were sham-operated on GD 12 or left untreated. Male fetuses of all control groups displayed the characteristic rise in plasma testosterone at GD 18 (as compared to GD 17 and 19); this was abolished by nicotine. Adult offspring of untreated or tartaric acid-treated dams exhibited a marked sexual dimorphism in their preference for saccharin-containing drinking water at 0.06-0.25%. No such sex difference was seen in offspring of nicotine-treated rats. In controls, the sexes differed with respect to the proportion of rats with high saccharin preference. In the group of males prenatally exposed to nicotine, the proportion of animals with high preference increased to the female level. These data indicate that prenatal exposure to nicotine can interfere with the development of the male gonadal axis and with the organization of sexually dimorphic behavior.