Dispersed cells of the gonads of newborn rats reaggregate histotypically in rotation culture. Ovarian cells form follicles, while testicular cells organize tubuli. When testis cell supernatant is added to ovarian cells, they form tubulus-like structures. This effect is impeded by simultaneous addition of monoclonal anti-H-Y antibody. It is concluded that H-Y antigen is the active factor of testis cell supernatant that induces sex-reversal of ovarian cells in vitro. The reverse experiment, i.e., exposure of testicular cells to anti-H-Y antiserum, does not result in the organization of follicular structures. These findings are consistent with the view that H-Y antigen is involved in testis differentiation by inducing testis cell-specific functions, rather than by cross-linking cells.