Presence of H-Y antigen has been correlated with testicular differentiation, and absence of H-Y with failure of testicular differentiation, in a variety of mammalian species. To determine more precisely the relationship between expression of H-Y antigen and development of the testis, we studied the cells of phenotypic females with the 46,XY male karyotype. Blood leukocytes were typed H-Y+ in five XY females with gonadal dysgenesis, although in other studies blood leukocytes from XY females with gonadal dysgenesis were typed H-Y-. Thus mere presence of H-Y antigen is not sufficient to guarantee normal differentiation of the testis. In the present paper we review evidence for an additional factor in gonadal organogenesis, the H-Y antigen receptor. We infer that testicular development requires engagement of H-Y and its receptor. It follows that XY gonadal dysgenesis is the consequence of functional absence of the H-Y testis inducer as in the following conditions: failure of synthesis of H-Y or failure of specific binding of H-Y.