The Fenholloway River near Perry, Florida, receives effluent from a paper mill and contains populations of masculinized female eastern mosquitofish, Gambusia holbrooki. A previous study identified the androgen precursor androstenedione at a low concentration (0.14 nM) in water samples from the river. The present study makes use of a toxicity identification and evaluation approach that includes solid phase extraction and high pressure liquid chromatography purification, androgen receptor transcription assays, and liquid chromatography mass spectroscopy to identify and characterize steroids in the Fenholloway River sediment. Androstenedione (2.4 nM) and progesterone (155 nM) were identified in the river sediment at concentrations greater than in the river water column (0.14 nM androstenedione, and 6.5 nM progesterone). Spring Creek, a comparison stream that does not receive mill effluent, contained low levels of progesterone (0.3 nM) but no androstenedione in the sediment. The data are consistent with the hypothesis that pine pulp-derived phytosteroids in the paper mill effluent accumulate in river sediment where they are converted by microbes into progesterone and this into androstenedione and other bioactive steroids. Equally important is that normal streams with much less organic matter still contain progesterone, but at dramatically lower levels. The presence of androgens and androgen precursors in the river water and sediment likely contributes to the masculinized phenotype of the female Gambusia holbrooki in the Fenholloway River.