Wnt-4 signaling has been implicated in female development, because its absence leads to partial female to male sex reversal in the mouse. Instead of Mullerian ducts, Wnt-4-deficient females have Wolffian ducts, suggesting a role for androgens in maintaining this single-sex duct type in females. We demonstrate here that testosterone is produced by the ovary of Wnt-4-deficient female embryos and is also detected in the embryonic plasma. Consistent with this, the expression of several genes encoding enzymes in the pathway leading to the synthesis of testosterone in the mouse is induced in the Wnt-4-deficient ovary, including Cyp11a, Cyp17, Hsd3b1, Hsd17b1, and Hsd17b3. Inhibition of androgen action with an antiandrogen, flutamide, during gestation leads to complete degeneration of the Wolffian ducts in 80% of the mutant females and degeneration of the cortical layer that resembles the tunica albuginea in the masculinized ovary. However, androgen action is not involved in the sexually dimorphic organization of endothelial cells in the Wnt-4 deficient ovary, because flutamide did not change the organization of the coelomic vessel. These data imply that Wnt-4 signaling normally acts to suppress testosterone biosynthesis in the female, and that testosterone is the putative mediator of the masculinization phenotype in Wnt-4-deficient females.