Studies in adrenocortical cells have implicated the orphan nuclear receptor SF-1 in the gene regulation of the steroid hydroxylases. We used targeted disruption of the Ftz-f1 gene, which encodes SF-l, to examine its role in intact mice. Despite normal survival in utero, all Ffz-F7 null animals died by postnatal day 8; these animals lacked adrenal glands and gonads and were severely deficient in corticosterone, supporting adrenocortical insufficiency as the probable cause of death. Male and female Ftz-F1 null mice had female internal genitalia, despite complete gonadal agenesis. These studies establish that the ffz-F1 gene is essential for sexual differentiation and formation of the primary steroidogenic tissues.