Exposure of female rats to stressors during the last week of pregnancy results in a selective feminization and demasculinization of adult sexual behaviors in the male offspring. No behavioral abnormalities are detectable in the female offspring, and reproductive morphological structures appear normal in both sexes. Existing data suggest that the mechanism mediating the so called Prenatal Stress Syndrome in male rats is an alteration in fetal testicular enzyme activity. This, in turn, leads to abnormal levels of testosterone, the hormone believed to masculinize sexual behavior potentials at critical stages of perinatal development. Specifically, the activity of the steroidogenic enzyme delta 5-3 beta-hydroxysteroid dehydrogenase in fetal Leydig cells and plasma titers of testosterone are low in prenatally stressed males on days 18 and 19 of gestation, a time when both of these substances reach maximal levels in control males. The implications of this model for sexual behavior differentiation in higher organisms is explored.