The signalling molecule WNT4 has been associated with sex reversal phenotypes in mammals. Here we show that the role of WNT4 in gonad development is to pattern the sex-specific vasculature and to regulate steroidogenic cell recruitment. Vascular formation and steroid production in the mammalian gonad occur in a sex-specific manner. During testis development, endothelial cells migrate from the mesonephros into the gonad to form a coelomic blood vessel. Leydig cells differentiate and produce steroid hormones a day later. Neither of these events occurs in the XX gonad. We show that WNT4 represses mesonephric endothelial and steroidogenic cell migration in the XX gonad,preventing the formation of a male-specific coelomic blood vessel and the production of steroids. In the XY gonad, Wnt4 expression is downregulated after sex determination. Transgenic misexpression of Wnt4 in the embryonic testis did not inhibit coelomic vessel formation but vascular pattern was affected. Leydig cell differentiation was not affected in these transgenic animals and our data implies that Wnt4 does not regulate steroidogenic cell differentiation but represses the migration of steroidogenic adrenal precursors into the gonad. These studies provide a model for understanding how the same signalling molecule can act on two different cell types to coordinate sex development.