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One hypothesis that would unify many of the apparently diverse patterns of gonadal differentiation in teleost fishes under a single conceptual scheme is that individuals develop in a female direction unless a masculinizing mechanism intervenes. We provided a descriptive test of this hypothesis in a diandric, protogynous wrasse in which males are produced through two, apparently different developmental sequences: ‘primary males’ develop testes as juveniles and remain male throughout life, while ‘secondary males’ develop ovaries as juveniles and later in adult life the functional ovary redifferentiates into a functional testis. The gonads of 128 individuals, from the smallest juveniles to full-sized adults, were examined histologically. Gonads of the smallest juveniles were undifferentiated or contained young oocytes with no ovarian cavity and no testicular tissue. As individuals increased in size, the proportion of oocytic gonads increased. The distribution of gonad types for larger individuals suggested that a portion ofthese oocytic gonads developed into ovaries, while another portion lost its oocytic elements and became testes. These patterns supported the hypothesis that the gonads of all individuals, including primary males, passed through an initial female phase prior to differentiating into an ovary or testis. The structure of primary testes was not identical to the structure of secondary testes. The critical difference between the two types lay in the presence of a large central cavity in the latter that was not present in the former. Positional differences in the duct system were only found in the posterior region of the gonad and were the consequence of a lateral internal split in the secondary gonad resulting from confluence of the central cavity.