Using genetically controlled all-female and all-male tilapia (Oreochromis niloticus), the role steroid hormones play in the sex differentiation was analyzed histologically, ultrastructurally, immunohistichemically and experimenntally. The results strongly suggest that endogenous estrogen acts as an ovarian inducer, and that the lack of steroid hormone including androgen is important for testicular differentiation. Moreover, the roles of steroid hormones in protogynous sex change of three-spotted wrasse (Halichoeres trimaculatus) and saddleback wrasse (Tharassoma duperrey) were examined. The results strongly support the hypothesis that the endogenous estrogen plays an important role in protogynous sex change.