Functional sex differences in reproduction, gender and sexual orientation and in the incidence of neurological and psychiatric diseases are presumed to be based on structural and functional differences in the hypothalamus and other limbic structures. Factors influencing gender, i.e., the feeling to be male or female, are prenatal hormones and compounds that change the levels of these hormones, such as anticonvulsants, while the influence of postnatal social factors is controversial. Genetic factors and prenatal hormone levels are factors in the determination of sexual orientation, i.e. heterosexuality, bisexuality or homosexuality. There is no convincing evidence for postnatal social factors involved in the determination of sexual orientation. The period of overt sexual differentiation of the human hypothalamus occurs between approximately four years of age and adulthood, thus much later than is generally presumed, although the late sexual differentiation may of course be based upon processes that have already been programmed in mid-pregnancy or during the neonatal period. The recently reported differences in a number of structures in the human hypothalamus and adjacent structures depend strongly on age. Replication of these data is certainly necessary. Since the size of brain structures may be influenced by premortem factors (e.g. agonal state) and postmortem factors (e.g. fixation time), one should not only perform volume measurements, but also estimate a parameter that is not dependent on such factors as, i.e., total cell number of the brain structure in question. In addition, functional differences that depend on the levels of circulating hormones in adulthood have been observed in several hypothalamic and other brain structures. The mechanisms causing sexual differentiation of hypothalamic nuclei, the pre- and postnatal factors influencing this process, and the exact functional consequences of the morphological and functional hypothalamic differences await further elucidation.