Virilization of the external genitalia in the male fetus requires testosterone and dihydrotestosterone (DHT), which is formed from testosterone by the action of the enzyme, 5α-reductase type 2 (5αR-2). Mediation of the effects of both testosterone and DHT requires a functional androgen receptor (AR) located in the cytoplasmic compartment of target cells. DHT (or testosterone) binding induces a conformational change which facilitates AR nuclear transport, phosphorylation and dimerization, ultimately regulating of the rate of transcription of androgen-dependent genes. Any event which impairs DHT formation (mutation within the 5αR-2 gene or 5αR-2 inhibitors) or normal function of the AR (mutation in the AR gene, antiandrogens) may result in insufficient androgen action in the male fetus and in subsequent undervirilization in the newborn. Hypospadias may be due to a defect in androgen action due to mutation of the 5αR-2 or of the AR gene. Mutation of unidentified genes is likely to underlie this displacement of the urethral meatus from the tip to the ventral side of the phallus. An aetiological role for environmental chemical products has been postulated, since ethnic as well as geographical differences in the incidence of hypospadias have been noted. Increasing evidence has been gathered indicating that widely used industrial and agricultural chemicals have deleterious effects on normal male sexual differentiation. Cryptorchidism and micropenis may represent an intersex phenotype, even if they are isolated. Aetiological factors include 5αR-2 gene mutation, AR gene mutation or environmental hormonal disruptors. In conclusion, several phenotypes have been attributed to insufficient androgen action during fetal life. Whereas mutations in the 5αR-2 gene and AR gene are natural, attention should be focused on environmental endocrine disruptors that are able to mimic steroid 5α-reductase deficiency or partial androgen insensitivity syndrome.