Gonadal sex is determined when the indifferent gonad differentiates as either testis or ovary.
At the time of fertilization, the XY zygote receives Sry, which encodes the testis determining factor. Transgenic mouse experiments demonstrated that Sry is the only Y-linked gene that is necessary and sufficient to initiate male development in mammals. It is thought that Sry protein may act as a transcription factor by modifying chromatin structure in regulatory regions of target genes. In the mouse, Sry is expressed in the pre-Sertoli cells. Transgenic mouse experiments indicate that a critical threshold of Sry expression must be achieved by a certain developmental stage for cells of the indifferent gonad to differentiate into Sertoli cells.