The sexually dimorphic nucleus of the preoptic area (SDN-POA) in the rat hypothalamus is larger in volume in males than in females due to a larger number of cells in the nucleus. Although the SDN-POA, and its development, have been extensively studied, the actual mechanism of its sexual differentiation has not been established. The results of previous studies have not supported a role for gonadal steroids in the regulation of neurogenesis or the determination of the migratory pathway perinatally. In this study, the role of cell death in the development of the sexual dimorphism in the SDN-POA was investigated using in situ end-labeling to visualize fragmented DNA in apoptotic cells. In the experiments described here, the incidence of apoptosis was determined in part of the SDN-POA, the central division of the medial preoptic nucleus (MPNc), over the first 13 days postnatally in male and female rats. There was a sex difference in the incidence of apoptosis in the MPNc between postnatal days 7 and 10; the incidence was higher in females. The role of testosterone (T) in regulating the incidence of apoptosis in the developing MPNc was examined in neonatally castrated males following T or vehicle injection. Testosterone had a profound inhibitory effect on the incidence of apoptosis between days 6 and 10. In a control region within the lateral preoptic area, there was no sex difference in the incidence of apoptosis, nor was there an effect of T. Thus, the data indicate that the regulation of apoptosis by T is one mechanism involved in the sexual differentiation of the SDN-POA.