The SRY gene (a gene that is typically on the Y chromosome in most mammals, though can rarely be on the X as well and can be absent from the Y chromosome) causes the development of Leydig cells of the testis which start secreting testosterone and the development of Sertoli cells which produce anti-Müllerian hormone.
Testosterone can be transformed into DHT by alpha-5 reductase. Testosterone and DHT cause the development of male organs.
The anti-Mullerian hormone causes the non-development of female organs.
The default is the development of female organs. Those hormones change it by getting inside the nucleus and changing how genes are expressed.
Non-mammals have a SOX (SRY-like box) gene that does the same function. This gene can be chromosome-specific or depend on environmental factors like temperature.
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