Female spotted hyenas (Crocuta crocuta) have an erectile peniform clitoris and a pseudoscrotum but no external vagina, all established by day 35 of a 110-day gestation. Recent studies indicate that these events are androgen-independent, although androgen secretion by fetal ovaries and testis was hypothesized previously to induce phallic development in both sexes. We present the first data relating to the capacity of the ovaries and testes of the spotted hyena to synthesize androgens at different stages of fetal life. Specifically, spotted hyena fetal gonads were examined by immunohistochemistry at GD 30, 45, 48, 65, and 95 for androgen-synthesizing enzymes, as related to the morphological development. Enzymes included 17alpha-hydroxylase/17,20-lyase cytochrome P450 (P450c17), cytochrome b5, 3beta-hydroxysteroid dehydrogenase (3betaHSD), and cholesterol side-chain cleavage cytochrome P450 (P450scc). Anti-Müllerian-hormone (AMH) expression was also examined. AMH was strongly expressed in fetal Sertoli cells from GD 30 and after. P450c17 expression was detected in Leydig cells of developing testes and surprisingly in Müllerian duct epithelium. Fetal ovaries began to organize and differentiate by GD 45, and medullary cells expressed P450c17, cytochrome b5, 3betaHSD, and P450scc. The findings support the hypothesis that external genital morphology is probably androgen-independent initially, but that fetal testicular androgens modify the secondary, male-specific phallic form and accessory organs. Fetal ovaries appear to develop substantial androgen-synthesizing capacity but not until phallic differentiation is complete, i.e. after GD 45 based on circulating androstenedione concentrations. During late gestation, fetal ovaries and testes synthesize androgens, possibly organizing the neural substrates of aggressive behaviors observed at birth in spotted hyenas. These data provide an endocrine rationale for sexual dimorphisms in phallic structure and reveal a potential source of androgenic support for neonatal aggression in female and male C. crocuta.