The present study investigated the effects of water temperature (18, 21, and 25 °C) on the histological process of gonadal sex differentiation of two commercially important atherinid fishes from South America, Odontesthes argentinensis (sea pejerrey) and Patagonina hatcheri (Patagonian freshwater pejerrey). In both species, female gonadal sex differentiation began with the formation of lateral stromal cell outgrowths and the appearance of meiotic oocytes. The male gonads remained quiescent for about twice as long as the female gonads, with differentiation becoming evident by the formation of the main sperm duct and of cysts of germ cells at the periphery of the gonads. Meiosis in males occurred relatively long after somatic differentiation of the testis. The ovaries of O. argentinensis differentiated at 28 days (20.3 mm) at 25 °C, 42 days (24.0 mm) at 21 °C, and 56 days (23.8 mm) at 18 °C. In the males, differentiation was observed at 98 days at 25 and 21 °C (39.4 mm and 40.4 mm, respectively), but at 112 days under 18 °C (40.7 mm). In P. hatcheri, differentiation of females occurred at 21 days (17.8 mm) at 25 °C, 28 days (20.8 mm) at 21 °C, and 35 days (23.2 mm) at 18 °C. Male differentiation became evident at 56 days under 25 and 21 °C (30.8 and 32.7 mm, respectively), and at 70 days (37.7 mm) at 18 °C. The sex-ratios of O. argentinensis reared at 18 or 21 °C were female-biased whereas those at 25 °C were not; groups reared at 18 °C had significantly more females than groups from the same progeny reared at 25 °C. In contrast, the sex-ratios in all groups of P. hatcheri did not differ significantly from 1:1 and no significant differences were found between groups of the same progeny reared at different temperatures. These results suggest the occurrence of thermolabile sex determination (TSD) in O. argentinensis whereas in P. hatcheri gonadal sex appears to be strongly genetically determined.