Chameleons are a family of lizards distinguished by several unique features related to their arboreal lifestyles, such as a ballistic tongue, skin color changes, independent movement of both eyes, a prehensile tail, and cleft hands and feet. The veiled chameleon (Chamaeleo calyptratus) has been proposed as a promising model species for studying squamate biology. Despite its potential, the developmental biology of this species remains poorly understood, particularly in terms of gonadal development. This study aimed to elucidate the development of the gonads in the veiled chameleon, from the initial appearance of the gonadal ridges through the sexual differentiation into ovaries and testes, to the establishment of the gonadal structures in both sexes. The study showed the accelerated appearance of gonadal primordia compared to the soma in the veiled chameleon, which is unique and possibly influenced by a prolonged in ovo development period due to the slowed rate of embryonic development in this species. The undifferentiated gonads are characterized by a voluminous medulla and a thin cortex. The process of gonadal sexual differentiation mirrors that seen in other vertebrates. Ovarian differentiation involves the development of a cortex containing germ cells and the loss of these cells in the medulla. Differentiated ovaries are characterized by a thin cortex and early induction of meiosis, leading to the formation of ovarian follicles before hatching. In contrast, testis differentiation involves the loss of germ cells from the cortex, its transformation into a thin epithelium, and the development of germ cell‐containing testis cords in the medulla. The testis cords originate from invagination and remain without forming a lumen during embryogenesis. This comprehensive examination of gonadal development in the veiled chameleon provides important insights into sexual differentiation processes in this species. Moreover, it may stimulate further, broader studies in vertebrate developmental biology.