Sexual differentiation in male marsupials has many similarities with that of eutherians. Marsupials have an XX-XY sex determining mechanism, and have a homologue of the testis-determining SRY gene on their Y-chromosome. However, the development pattern of SRY gene expression is different from the mouse in that it is expressed for a much longer period. SRY is expressed in a range of non-gonadal tissues in male pouch young and adults which is similar to the human pattern, and raises questions as to its particular role(s) in sexual differentiation. Similarly Müllerian inhibiting substance (MIS) is produced in the developing testis over a longer period than in the mouse. Since ovaries cultured with MIS or transplanted into male recipient pouch young develop tubular structures, MIS may induce Sertoli cell formation. Testosterone is produced by the neonatal testis, and this stimulates Wolffian duct development to form the vas deferens and epididymis. Virilization of urogenital sinus is also androgen-dependent. However, virilization of the prostate and phallus occurs more than three weeks after the onset of testosterone production, suggesting that the timing of this may be regulated by delayed activation of the androgen receptor pathway. Unlike in eutherians, differentiation of the scrotum and mammary glands is not dependent on testicular hormones, but is independently regulated by an X-linked genetic mechanism. Clearly marsupials provide a unique perspective to help us clarify the mechanisms underlying sexual development in all mammals.