Studies were conducted to elucidate the importance of androgen-mediated induction of the extreme masculinization of the external genitalia in female spotted hyenas. Phallic size and shape; androgen receptor (AR) and α-actin expression; and sex-specific differences in phallic retractor musculature, erectile tissue, tunica albuginea, and urethra/urogenital sinus were examined in male and female fetuses from Day 30 of gestation to term. Similar outcomes were assessed in fetuses from dams treated with an AR blocker and a 5α-reductase inhibitor (antiandrogen treatment). Clitoral and penile development were already advanced at Day 30 of gestation and grossly indistinguishable between male and female fetuses throughout pregnancy. Sex-specific differences in internal phallic organization were evident at Gestational Day 45, coincident with AR expression and testicular differentiation. Antiandrogen treatment inhibited prostatic development in males and effectively feminized internal penile anatomy. We conclude that gross masculinization of phallic size and shape of male and female fetuses is androgen-independent, but that sexual dimorphism of internal phallic structure is dependent on fetal testicular androgens acting via AR in the relevant cells/tissues. Androgens secreted by the maternal ovaries and metabolized by the placenta do not appear to be involved in gross masculinization or in most of the sex differences in internal phallic structure.