This review/research paper summarizes data on development of the external genitalia of the spotted hyena, a fascinating mammal noted for extreme masculinization of the female external genitalia. The female spotted hyena is the only extant mammal that mates and gives birth through a pendulous penis-like clitoris. Our studies indicate that early formation of the phallus in both males and females is independent of androgens; indeed the phallus forms before the fetal testes or ovaries are capable of synthesizing androgens. Likewise, pre- and postnatal growth in length of the penis and clitoris is minimally affected by "androgen status". Nonetheless, several internal morphologies, as well as external surface features of the phallus, are androgen-dependent and thus account for dimorphism between the penis and clitoris. Finally, estrogens play a critical role in penile and clitoral development, specifying the position of the urethral orifice, determining elasticity of the urethral meatus, and facilitating epithelial-epithelial fusion events required for proper formation of the distal urethra/urogenital sinus and prepuce. Accordingly, prenatal inhibition of estrogen synthesis via administration of letrozole (an aromatase inhibitor) leads to malformations of the glans as well as the prepuce (hypospadias). The effects of prenatal androgens, anti-androgens and impaired estrogen synthesis correlated with the tissue expression of androgen and estrogen receptors.