Masculinisation of indifferent external genitalia occurs via the action of testosterone

produced by the interstitial cells of the foetal testes.

As the primordial phallus enlarges and elongates to form the penis, the urethral folds form
the lateral wall of the urethral groove on the ventral side of the penis. This groove is lined by
a proliferation of endodermal cells, the urethral plate, which extends from the phallic
portion of the urogenital sinus.

The urethral folds fuse with each other along the ventral surface of the penis to form the
spongy urethra. The surface ectoderm fuses in the median plane of the penis, forming the
penile raphe and enclosing the spongy urethra within the penis.

The primordial phallus in the female gradually becomes the clitoris which is still relatively
large at 18 weeks. The urethral folds do not fuse except posteriorly where they fuse to form
the frenulum of the labia minora. The unfused parts of the urogenital folds become the labia
minora