The newborn whose genitalia are ambiguous presents a challenge to the pediatrician and the family. A clear understanding of the basis of sex differentiation and timely consultation with a pediatric endocrinologist is critical in the evaluation and determination of sex of rearing in a newborn who has ambiguous genitalia. Sex karyotype and a 17-OHP level may suffice in the initial evaluation of female pseudohermaphroditism because most patients will have virilizing CAH. If male pseudohermaphroditism is suspected on the basis of palpable gonads, we routinely obtain a karyotype, basal adrenal steroid levels, and levels of hCG-stimulated serum testosterone and DHT, then consider a testosterone treatment trial. Physicians who care for children who have ambiguous genitalia must appreciate the family's cultural, religious, and psychological needs and avoid determining sex of rearing before accurate diagnosis is reached.