In eutherian mammals sexual differentiation occurs during fetal development, making experimental manipulation difficult, unlike in marsupials. We are investigating the roles of several key genes and hormones whose exact role in gonadal differentiation is still unclear using the tammar wallaby (Macropus eugenii) as a model. As in humans, unlike in mice, the testis-determining gene SRY is expressed in male tammar fetuses in many tissues over an extended period. Not all sexual differentiation depends on testicular hormones. Scrotum and mammary glands are under the control of X-linked gene(s). Our demonstration of DMRT1 expression in tammar and mouse ovaries suggests it has a wider role than previously thought. The Y-borne copy of ATRX (ATRY) is coexpressed with DMRT1 in developing testis. Gonadal sex reversal can be induced in males by neonatal oestrogen treatment and in females by grafting developing ovaries to males or culturing them in minimal medium. Treatments of developing young with various androgens, and studies of steroid metabolism have shown that the steroid androstenediol may have a previously unrecognised role in virilisation. Our studies using a marsupial model have given some surprising insights into the evolution and control of sexual development in all mammals.