A pregnancy luteoma represents an unusual response of ovarian stromal cells to the altered hormonal levels of pregnancy. It is a distinctive non-neoplastic lesion characterized by solid proliferations of luteinized cells resulting in a tumor-like ovarian enlargement. Most patients are asymptomatic; the ovarian enlargement is usually discovered incidentally at cesarean section or during postpartum tubal ligation. We report a typical case that we found at cesarean section to be associated with a virilized infant who manifested clitoromegaly and labial fusion. We detected an increased level of testosterone in the maternal patient. We concluded that the ovarian luteoma induced the fetal virilization.