The mammalian brain appears to be inherently feminine and the action of testicular hormones during development is necessary for the differentiation of the masculine brain both in terms of functional potential and actual structure. Experimental evidence for this statement is reviewed in this discussion. Recent discoveries of marked structural sex differences in the central nervous system, such as the sexually dimorphic nucleus of the preoptic area in the rat, offer model systems to investigate potential mechanisms by which gonadal hormones permanently modify neuronal differentiation. Although effects of these steroids on neurogenesis and neuronal migration and specification have not been conclusively eliminated, it is currently believed, but not proven, that the principle mechanism of steroid action is to maintain neuronal survival during a period of neuronal death. The structural models of the sexual differentiation of the central nervous system also provide the opportunity to identify sex differences in neurochemical distribution. Two examples in the rat brain are presented: the distribution of serotonin-immunoreactive fibers in the medial preoptic nucleus and of tyrosine hydroxylase-immunoreactive fibers and cells in the anteroventral periventricular nucleus. It is likely that sexual dimorphisms will be found to be characteristic of many neural and neurochemical systems. The final section of this review raises the possibility that the brain of the adult may, in response to steroid action, be morphologically plastic, and considers briefly the likelihood that the brain of the human species is also influenced during development by the hormonal environment.