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An important feature of mammalian development is the generation of sexually dimorphic reproductive tracts from the Mullerian and Wolffian ducts.In females, Mullerian ducts develop into the oviduct, uterus, cervix and upper vagina, whereas Wolffian ducts regress. In males, testosterone promotes differentiation of Wolffian ducts into the epididymis, vas deferens and seminal vesicle. The Sertoli cells of the testes produce Mullerian-inhibiting substance, which stimulates Mullerian duct regression in males [1-4]. The receptor for Mullerian-inhibiting substance is expressed by mesenchymal cells underlying the Mullerian duct that are thought to mediate regression of the duct [5-7]. Mutations that inactivate either Mullerian-inhibiting substance or its receptor allow development of the female reproductive tract in males [8-12]. These pseudohermaphrodites are frequently infertile because sperm passage is blocked by the presence of the female reproductive system [9,10,12]. Here we show that male mice lacking the signalling molecule Wnt-7a fail to undergo regression of the Mullerian duct as a result of the absence of the receptor for Mullerian-inhibiting substance. Wnt7a-deficient females are infertile because of abnormal development of the oviduct and uterus, both of which are Mullerian duct derivatives. Therefore, we propose that signalling by Wnt-7a allows sexually dimorphic development of the Mullerian ducts.