To characterize the mechanism of androgen mediated development of the male urogenital tract, the uptake and metabolism of testosterone- 1,2-3H have been investigated in urogenital tract tissues from rabbit embryos that varied from 17 to 27 days of gestation. In both the urogenital tubercle and the urogenital sinus the content of testosterone was small under all conditions studied. In contrast, the intracellular concentration of dihydrotestosterone in these tissues was significant following incubation with testosterone, suggesting that dihydrotestosterone may play a unique role in the development of a tissue to buffer gradient for androgen in urogenital sinus and urogenital tubercle and that dihydrotestosterone may be the masculinizing hormone in these tissues. In the mullerian and wolffian ducts and the mesonephros, however, major intracellular to buffer gradients for testosterone develop prior to and during male development of the ducts even when the incubations are performed at 4 C. Since a large portion of this uptake is displaceable by an excess of non-radioactive hormone, the findings are compatible with the presence of a specific binding ligand for testosterone in these tissues. Moreover, the uptake of testosterone is demonstrable under circumstances in which dihydrotestosterone formation is immeasurably low, leading to the conclusion that testosterone itself is the effective intracellular androgen mediating the initial events in the differentiation of the wolffian duct into the epididymis, vas deferens, and seminal vesicle.(Endocrinology92: 1192, 1973)