Although many studies implicate sex steroids in the process of sexual differentiation, the exact role played by these substances in lower vertebrates, especially teleost fish, is not clear, since it is not conclusively known whether sex steroids are the cause or an early consequence of sex differentiation. By hormonal manipulation and specific crossings, it is possible to produce all-female stocks of the otherwise gonochoristic chinook salmon (Oncorhynchus tshawytscha). These all-female stocks are an excellent model to study the effects of steroids on sexual differentiation since the genetic sex is known before the actual differentiation of the embryonic gonads takes place. In the present study, we show that treatment with a nonsteroidal inhibitor of aromatase, the enzyme that catalyzes the conversion from androgens to estrogens, for only 2 hours when the gonads were bipotent, caused genetic females to develop into normal males. Furthermore, these males had testes which were indistinguishable both in size and in structure from those of genetic males, and completed all the stages of spermatogenesis. At 2 years of age, these males produced viable sperm capable of inducing normal embryonic development when used to fertilize eggs, with a resulting all-female progeny. These results provide strong support for Yamamoto's theory (Yamamoto, '69) that androgens and estrogens are natural sex inducers in gonochoristic fish, and suggest that aromatase plays a pivotal role in the sex differentiation of salmon. Thus, by brief treatment with an aromatase inhibitor at a specific time in development, an organism was induced to develop a funtional, phenotypic sex different from its genetic sex. © 1994 Wiley-Liss, Inc.