The most widely accepted mechanism of male urethral development proposes that the urethral plate is elevated by urethral folds which fuse ventrally in a proximal-to-distal sequence. Unlike its proximal counterpart, the urethra which forms within the glans is lined by a stratified squamous epithelium and has a more controversial development. One theory supports the idea that fusion of the urethral folds extends all the way to the tip of the glans. Another theory suggests that a solid ectodermal in-growth of epidermis canalizes the glandar urethra. We hypothesized that the use of immunohistochemical staining and tissue recombinant grafting would delineate the epithelia involved and lend clues to their origin. Thirty-six human fetal phallic specimens of gestational ages 5-22 weeks were sectioned and stained immunohistochemically with antibodies raised against different cytokeratins. Evaluation of the sections showed that the urethral plate, an extension of the urogenital sinus, extended to the tip of the phallus and maintained patency and continuity throughout the process of urethral development. The entire urethra, including the glans portion, was formed by dorsal extension and disintegration of the urethral plate combined with ventral growth and fusion of the urethral folds. Sections of the distal glandar urethra showed no evidence of a solid ectodermal ingrowth. Rather, immunostaining results at different ages suggested differentiation of the endodermal urethral plate into a stratified squamous epithelium. To determine whether urothelium could be induced to express a stratified squamous phenotype, mouse fetal bladder epithelium was combined with rat fetal genital tubercle mesenchyme and grown under the renal capsule of athymic mice. The bladder epithelium differentiated into a stratified squamous epithelium. Thus, proper mesenchymal signaling may induce differentiation of urothelium into a stratified squamous phenotype, such as during development of the urethra of the glans penis.