The birth of a new baby is one of the most dramatic events in a family, and the first question is usually "is it a boy or a girl?" The newborn infant with ambiguous external genitalia often comes as a surprise for the doctors as well as the parents and is sometimes described as an endocrine emergency situation presenting a problem of sex assignment. The nomenclature such as 'intersex', 'hermaphrodite', and 'pseudohermaphrodite' is out of date as well as confusing, and many urologists are concerned that these confusing terms could be perceived to be pejorative by some affected families. In response to concerns regarding outdated and controversial terms, the Chicago Consensus held in 2005 recommended new terminology based on the umbrella term disorders of sex differentiation (DSDs). The term DSD has a comprehensive definition including any problem noted at birth in which the genitalia are atypical in relation to the chromosomes or gonads. The karyotype is used as a prefix defining the classification of DSD. DSDs are rare and complex. The optimal management of patients with DSD must be individualized and multidisciplinary, considering all aspects, including psychological care and full disclosure of alternatives relating to surgery type and timing. Although further studies are necessary to confirm guidelines and recommendations fitting for the individual patients with DSD, this article is an attempt to provide a balanced perspective for new taxonomy, clinical evaluation, and medical, surgical, and psychological management of DSD.