Having some degree of sex organs from both sexes. A person with this is said to be an intersexual. Hermaphrodite is also used to mean this, but often in a derogatory manner.

People like this do not have fully developed sex organs of both sexes, due to the way they develop in the body. Usually they tend to be distinctly more of one than of the other.

They are almost always sterile.

Intersexuality (having both male and female genital characteristics) occurs in a number of forms. Here are some common causes, and approximate rates of occurance.:

Congenital Adrenal Hyperplasia (CAH) is the most common cause of intersexuality in genetically female (XX) people. It results from a problem in the adrenal gland that causes overproduction of testosterone, which initiates virilization (masculinization) in utero. The results can range from generally female genitals, with an enlarged clitoris, to generally male, but without testes. Virilization continues after birth, especially at puberty. Because the disorder is metabolic, CAH people may develop metabolic imbalances, which can be treated. If the adrenal gland only malfunctions after birth, this is called Late Onset CAH. It can occur in both sexes, although it is more noticible in females. (Classic: one in 13,000 births. Late Onset: one in 66 individuals.)

Progestin Induced Virilization is caused when a fetus is exposed to unnatural androgens in utero. This is usually progestin, which was given to women in the 1950's and 1960's to prevent miscarriage (although it is ineffective for this purpose). The results are similar to CAH, but because the disorder is not metabolic, they develop more or less normally after birth. (no statistics)

Androgen Insensitivity Syndrome (AIS) is usually a genetic disorder passed from mother to son, although it can occur through mutation. The child is genetically male (XY), and the fetus develops testes. However, the fetus does not react to androgens ("male" hormones, such as testosterone) and therefore develops normal-looking female genitals. The testes produce mullerian inhibiting hormone, which prevents the development of other female sex organs. A person with AIS is biologically female, but lacks a uterus, fallopian tubes, cervix, and the upper part of the vagina. At puberty, they will develop breasts, but not pubic or underarm hair, and they won't menstruate. They are always sterile. They may be at risk of testicular cancer in the undescended testes. (one in 13,000 births)

Partial Androgen Insensitivity Syndrome (PAIS) has similar causes to AIS, but results in "ambiguous genetalia", ie a large clitoris, or a small and hypospadic penis. PAIS has varying levels of severity, and may be the cause of infertility in otherwise normal-looking men. (one in 130,000 births)

Hypospadias occurs when the opening of the urethra is somewhere besides the tip of the penis, usually on the underside. The opening might be mildly displaced, just on the underside of the glans. In more severe cases, the opening is larger, and in the perineum or along the shaft of the penis (resembling a vaginal opening). A hypospadic penis can be a symptom of another disorder. (Opening in perineum or along penile shaft: 1 in 2000 births. Opening between corona and tip of glans: 1 in 770 births)

Klinefelter Syndrome occurs when a male child receives an extra X chromosome from either his mother or father (XXY). The effects of this vary widely, but commonly include small, firm testes, and infertility due to lack of sperm. Low levels of testosterone may mean that the men don't virilize, but they are generally healthy and the disorder often goes undiagnosed. (1 in 1000 births)

Most of this information is from http://www.isna.org

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