Sex determination in mammals proceeds like a cascade from the level of the sex chromosomes to the gonads, to the genital ducts, and finally to the expression of the male or female phenotype. At the level of the genital ducts male sex organs are induced by testosterone. Its action depends on an intact cytoplasmic androgen receptor protein. The testicular feminization mutation (tfm) leads to loss of hormone binding capacity. Individuals with testes but female external phenotype develop. In the mouse the interaction of androgen insensitive Tfm cells with normal cells can be studied in mosaic individuals composed of both cell types, and in organ culture by recombination of Tfm and normal tissues. The experiments show that under the action of testosterone the normal cells express male differentiated cellular functions, whereas the Tfm cells differentiate in female direction. In respect to proliferation and expression of male or female organ structures, however, both cell types communicate via local factors. Thus, instead of irregular malformations intersex organs develop.