Sexual differentiation in humans is the process of development of sex differences in humans. It is defined as the development of phenotypic structures consequent to the action of hormones produced following gonadal determination. Sexual differentiation includes development of different genitals and internal genital tracts; body hair also plays a role in sex identification.

The development of sexual differences begins with the XY sex-determination system that is present in humans, and complex mechanisms are responsible for the development of the phenotypic differences between male and female humans from an undifferentiated zygote. Females typically have two X chromosomes, and males typically have a Y chromosome and an X chromosome. At an early stage in embryonic development, both sexes possess equivalent internal structures. These are the mesonephric ducts and paramesonephric ducts. The presence of the SRY gene on the Y chromosome causes the development of the testes in males, and the subsequent release of hormones which cause the paramesonephric ducts to regress. In females, the mesonephric ducts regress.

Disorders of sexual development (DSD), encompassing conditions characterized by the appearance of undeveloped genitals that may be ambiguous, or look like those typical for the opposite sex, sometimes known as intersex, can be a result of genetic and hormonal factors.

Most mammals, including humans, have an XY sex-determination system: the Y chromosome carries factors responsible for triggering male development. In the absence of a Y chromosome, the fetus will undergo female development. This is because of the presence of the sex-determining region of the Y chromosome, also known as the SRY gene. Thus, male mammals typically have an X and a Y chromosome (XY), while female mammals typically have two X chromosomes (XX).

Chromosomal sex is determined at the time of fertilization; a chromosome from the sperm cell, either X or Y, fuses with the X chromosome in the egg cell. Gonadal sex refers to the gonads, that is the testicles or ovaries, depending on which genes are expressed. Phenotypic sex refers to the structures of the external and internal genitalia.

Six weeks elapse after fertilization before the first signs of sex differentiation can be observed in human embryos. The embryo and subsequent early fetus appear to be sexually indifferent, looking neither like a male or a female. Over the next several weeks, hormones are produced that cause undifferentiated tissue to transform into either male or female reproductive organs. This process is called sexual differentiation. The precursor of the internal female sex organs is called the Müllerian system.

Differentiation between the sexes of the sex organs occurs throughout embryological, fetal and later life. In both males and females, the sex organs consist of two structures: the internal genitalia and the external genitalia. In males, the gonads are the testicles and in females, they are the ovaries. These are the organs that produce gametes (egg and sperm), the reproductive cells that will eventually meet to form the fertilized egg (zygote).

As the zygote divides, it first becomes the embryo (which means 'growing within'), typically between zero and eight weeks, then from the eighth week until birth, it is considered the fetus (which means 'unborn offspring'). The internal genitalia are all the accessory glands and ducts that connect the gonads to the outside environment. The external genitalia consist of all the external reproductive structures. The sex of an early embryo cannot be determined because the reproductive structures do not differentiate until the seventh week. Prior to this, the child is considered bipotential because it cannot be identified as male or female.