Castration of the male rat during the first three days of life allows retention of the cyclic pattern of gonadotrophin release with which the male is born. Since the neonatally castrated male shares several endocrine characteristics with the female, the terms feminine male or FALE have been employed to identify these animals. Twenty-seven of 28 FALES developed corpora lutea (CL) in ovarian transplants provided no other treatment was initiated. In contrast, exposure to constant illumination, suprachiasmatic lesions, or transection of anterior hypothalamic pathways prevented CL formation in 18 of 20 FALES. These findings support the concept that the preoptic-anterior hypothalamic region is an essential component of the neural mechanism which regulates the cyclic luteinization of ovarian grafts in the FALE. Since the FALE is a male rat in which differentiation has not been permitted to occur, it is suggested that sexual differentiation of the normal male hypothalamus consists of an alteration in function of this preoptic system.