Estrogens are responsible for most characteristics of the female sex of a species, such as metabolic, behavioral, and morphological changes during reproduction. Artificial estradiol-17β (E2) treatment induces sex reversal in some fish. The Japanese pufferfish (Takifugu rubripes) has the most compact genome among vertebrates and great pottial for comparative genome analysis. In this paper, we describe the influence of E2 treatment during gonadal development in the pufferfish. After hatching, fry were treated with no (control) or a 0.1, 1, 10, or 100 μg/g diet from 21 to 80 days after hatching (dah). Doublesex-mab3-related transcription factor (DMRT1) is involved in testicular development. VASA is responsible for germ cell development, and CYP19A plays a role in E2 biosynthesis during ovarian development across animal phyla as well as in gonadal morphology after E2 treatment. DMRT1, VASA, and CYP19A were investigated in the gonads of E2-treated pufferfish. Fish fed with the highest dose (E2 100 µg/g diet) developed intersexual gonads in the testis; the majority of germ cells were oocytes, but some spermatocytes were detected. RT-PCR results showed the expression of VASA and CYP19A in all intersexual gonads and DMRT1 in some. Furthermore, abnormalities in the epithelium-tunica layer were detected, and gonadal somatic cells (e.g., granulosa cells, theca cells, or germinal epithelium) proliferated extensively in the intersexual gonad. These results suggest that E2 treatment induces ovarian development in the bipotential gonads of genetic males by modification of gonadal somatic cells and E2 production, mediated by CYP19A.