This paper reviews the current knowledge concerning the endocrine and environmental regulations of both gonadal sex differentiation in gonochoristic and sex inversion in hermaphroditic fish. Within the central nervous system, gonadotropins seem to play a role in triggering sex inversion in hermaphroditic fish. In gonochorists, although potentially active around this period, the hypothalamo-pituitary axis is probably not involved in triggering sex differentiation. Although steroids and steroidogenic enzymes are probably not the initial triggers of sex differentiation, new data, including molecular approaches, have confirmed that they are key physiological steps in the regulation of this process. Environmental factors can strongly influence sex differentiation and sex inversion in gonochoristic and hermaphroditic fish, respectively. The most important environmental determinant of sex would appear to be temperature in the former species, and social factors in the latter. Interactions between environmental factors and genotype have been suggested for both gonochoristic and hermaphroditic fish.