To elucidate the involvement of endogenous estrogen (estradiol-17beta; E2) and the decisive factor (somatic or germinal element) in the ovarian differentiation of tropical marine teleosts, the effect of the aromatase inhibitor (AI) fadrozole on gonadal sex differentiation in the golden rabbitfish Siganus guttatus (Bloch) was examined for different dosages and periods of treatment. Fadrozole interrupted ovarian cavity formation at a dose of 500 microg g(-1) diet, while there was little effect at 10 or 100 microg g(-1). The gonads from both the 30-day and 90-day administration (500 microg g(-1) diet) groups were significantly biased toward testes (P=0.002 and0.0001, respectively), which suggests strongly that E2 is involved in early ovarian differentiation and that its suppression is an indispensable condition for testicular differentiation in S. guttatus. The results from the two different AI treatment periods imply that the initial feminization of somatic gonadal elements determines subsequent ovarian differentiation, including oogenesis: a conclusion supported by the considerable time lag between ovarian cavity formation and subsequent oogenesis during normal ovarian differentiation in S. guttatus.