In this review, we explore the intricate development of sexual identity, drawing insights from genetic, endocrinological, neuroanatomical, and neurophysiological studies. Gender identity, encapsulating an individual's internal perception as male or female, undergoes a nuanced and gradual formation, commencing early in life and progressing through distinct stages. Gender nonconformity delineates behaviors that diverge from culturally prescribed norms, while gender dysphoria encompasses the emotional distress experienced by some individuals due to a mismatch between their gender identity and assigned sex at birth. The genesis of sexual identity involves multifaceted processes spanning numerous years. Human sex differentiation involves the suppression or inactivation of specific genes, a phenomenon illuminated by genetic investigations into gender dysphoria, which have shown comparable rates of genetic variations to the general population. Nevertheless, twin studies suggest an augmented likelihood of transsexuality among family members, hinting at potential environmental influences. Brain sexual differentiation occurs during mid-to-late pregnancy due to the impact of gonadal hormones. The mechanisms underpinning the loss of feminine brain characteristics and subsequent masculinization likely involve a combination of factors, indicating a complex interplay rather than a singular cause. Studies propose that human sexual behavior is not governed by a solitary gene but rather by a network of genes dispersed across the genome. Notably, disparities in brain structures, functionalities between genders, as well as variations in endocrine and serotonin-dopamine levels, are implicated in the etiology of gender dysphoria, contributing to the understanding of this complex phenomenon situated between genders.