Long story short? We don’t know.
Slightly longer story: There is a region of the brain that we have been able to determine “lights up” and becomes active when we view someone we see as sexually attractive. But it only lights up in scans when viewing somebody the viewer sees as sexually attractive. Gay men and straight women both light up when they see men they view as attractive, but not when they view attractive women, even if the *know* the woman is attractive (which itself is controlled in a couple of different parts of the brain). The reverse is true for gay women and straight men. While bisexual/pansexual folks will light up that part of their brain to both genders.
So we know sexual attraction is in the brain, but not the “hows” or “whats” yet.
The exact details are unknown. There might be some differences in a region of the brain called inah-3 (third interstitial nucleus of the anterior hypothalamus ) in the hypothalamus. It appears to guide sexual activity, if you damage this part of the brain in a monkey they’ll masturbate, but won’t have sex. This part of the brain is different sizes in men and women (with it being larger in men) and a (questionable) study showed that it was different in gay vs straight men with the region being smaller in gay men (although still larger than in women). I’m not sure if this study has been repeated in humans, but there have been studies in animals with equivalent structures (inah-3 is a human and primate thing) with similar results.
I know this is a bit beyond your exact question but pre-natal hormone environment looks to be a driving factor. In animals, messing with hormones early on can affect development of that part of the brain and affect the sexual behavior of the animal. In humans, pretty much every single indicator of pre natal hormones (as well as random ass anatomical and cognitive difference between men and women) also show differences in gay vs straight individuals.
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