The conversion of [1,2,6,7-3H]-testosterone to radioactive estradiol was assessed in tissue slices of 18 different tissues from rabbit embryos that varied in age 16-29 days gestation. Significant rates of estradiol synthesis were demonstrated only in ovaries [4.2 .+-. 0.7 (mean .+-. SEM [standard error of mean] pmol/h per mg protein], placenta (0.7 .+-. 0.2 pmol/h per mg protein) and brain (0.3 .+-. 0.1 pmol/h per mg protein). Estradiol formation was undetectable in day 16 gonads of both sexes and in testes at all ages examined, but by day 18 it was demonstrable in ovaries and rose rapidly to reach a level of 6 pmol/h per mg protein by day 19. The time of appearance of the enzymatic capacity to convert testosterone to estradiol in the ovary was similar to the onset of the enzymatic capacity to form testosterone by the fetal testis. The acquisition of the enzymatic activities that allow specific endocrine function by these 2 tissues may be regulated by the same or similar factors during embryonic development.