Arguably the most defining moment in our lives is fertilization, the point at which we inherit either an X or a Y chromosome from our father. The profoundly different journeys of male and female life are thus decided by a genetic coin toss. These differences begin to unfold during fetal development, when the Y-chromosomal Sry (“sex-determining region Y”) gene is activated in males and acts as a switch that diverts the fate of the undifferentiated gonadal primordia, the genital ridges, towards testis development. This sex-determining event sets in train a cascade of morphological changes, gene regulation, and molecular interactions that directs the differentiation of male characteristics. If this does not occur, alternative molecular cascades and cellular events drive the genital ridges toward ovary development. Once testis or ovary differentiation has occurred, our sexual fate is further sealed through the action of sex-specific gonadal hormones. We review here the molecular and cellular events (differentiation, migration, proliferation, and communication) that distinguish testis and ovary during fetal development, and the changes in gene regulation that underpin these two alternate pathways. The growing body of knowledge relating to testis development, and the beginnings of a picture of ovary development, together illustrate the complex mechanisms by which these organ systems develop, inform the etiology, diagnosis, and management of disorders of sexual development, and help define what it is to be male or female.