In this review, we report permanent dysmorphogenesis of the penis and loss of fertility in adult rats treated neonatally with estrogen. Specifically, we report replacement of smooth muscle cells and cavernous spaces by fat cells in the corpus cavernosum penis, but not in the adjoining corpus spongiosum. Induction of these novel, region-specific phenotypes is dose-dependent, requires a critical window of exposure and associated with decreased testosterone and up-regulation of estrogen receptor α (ERα). The resistance of ERα knockout mice to develop these abnormalities implies an unequivocal role for ERα in mediating maldevelopment of the penis. Additionally, the prevention of estrogen-inducible penile abnormalities by ER antagonist ICI 182 780 implies that a functional ER-mediated pathway is essential for inducing penile abnormalities. Likewise, the ability of testosterone or dihydrotestosterone to negate these abnormalities suggests a role for an androgen receptor (AR)-mediated pathway. Taken together, these observations led us to hypothesize that neonatal estrogen exposure, via an ER-mediated pathway (direct action) or an AR-mediated pathway (indirect action through decreased testosterone) or both pathways, up-regulates ERα expression in stromal cells of the penis, which are then reprogrammed such that their differentiation into smooth muscle cells is inhibited and their differentiation into adipocytes is stimulated.