During embryonic development, mutually antagonistic signalling cascades determine gonadal fate towards a testicular or ovarian identity. Errors in this process result in Disorders of Sex Development (DSDs), characterised by discordance between chromosomal, gonadal, and anatomical sex. The absence of an appropriate, accessible in-vitro system is a major obstacle in understanding mechanisms of sex-determination/DSDs. Here, we describe protocols for differentiation of mouse and human pluripotent cells towards gonadal progenitors. Transcriptomic analysis reveals that the in-vitro-derived murine gonadal cells are equivalent to E11.5 in-vivo gonad progenitors. Using similar conditions, Sertoli-like cells derived from 46,XY human induced pluripotent stem cells (hiPSCs) exhibit sustained expression of testis-specific genes, secrete AMH, migrate and form tubular structures. Cells derived from 46,XY DSD female hiPSCs, carrying a NR5A1 variant, show aberrant gene expression and absence of tubule formation. CRISPR/Cas9-mediated variant correction rescued the phenotype. This is a robust tool to understand mechanisms of sex-determination and model DSDs.