In mammals, biological differences between males and females, which influence many aspects of their physical, social, and psychological environments, are solely determined genetically. In the presence of a Y chromosome, the gonadal primordium will differentiate into a testis, whereas in the absence of the Y chromosome an ovary will develop. Testis and ovary subsequently direct the differentiation of all secondary sex characteristics down the male and female pathway, respectively. The male-determining factor on the Y chromosome, SRY, was identified some 20 years ago. Since then, significant progress has been made toward understanding the molecular and cellular pathways that result in the formation of a testis. Here, we review what is known about testis differentiation in mice and humans, with reference to other species where appropriate.