The genital tubercle is a bipotential anlage that can develop into a penis or a clitoris. Formation of the penis requires synthesis within the tubercle of the androgen dihydrotestosterone by steroid 5 alpha-reductase isozymes. Isozyme 1 mRNA and protein were present in epithelial cells, whereas isozyme 2 transcripts were present in mesenchymal cells of developing genital tubercles from day 17, 19, and 21 rat embryos. These expression patterns were observed in both uncommitted anlagen and in committed male or female structures. Androgens did not significantly influence levels of 5 alpha-reductase mRNAs or affect their cellular distributions. Together with genetic data, the results implicate the mesenchyme as the crucial cell type in formation of the male external genitalia.