The ontogeny of Müllerian inhibiting substance (MIS) production by the developing testis of an Australian marsupial, the tammar wallaby (Macropus eugenii), was determined during pouch life using an organ-culture bioassay of mouse fetal urogenital ridge. This information was related to the morphological events during testicular migration and descent. MIS biological activity was found in testes (but not ovaries or liver) of pouch young from 2 to 85 days of age. MIS production had commenced by day 2, which is within a day of the first gross morphological signs of testicular differentiation. Müllerian duct regression occurred between 10 and 30 days, which partly coincided with testicular migration to the inguinal region and enlargement of the gubernacular bulb (15 to 30 days). These observations are consistent with the hypothesis that MIS may be involved in testicular transabdominal migration. The epididymis commenced development and growth only after the testis had descended through the inguinal ring. This provides no support for the suggestion that the epididymis is involved in testicular descent into the scrotum. The basic sequence of events in post-testicular sexual differentiation in the wallaby is sufficiently similar to that seen in eutherian mammals to make it an excellent experimental model for future studies of testicular differentiation, migration and descent.