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In this paper the role of the testicles in male psychological development is thoroughly investigated. All previous psychoanalytic studies are reviewed; new clinical material is presented; critical research data from pediatric urology and physiological sex research are utilized. A number of significant conclusions emerge. (1) Certain cases of pathological castration anxiety are explained by a psychosomatic phenomenon (the “testicular vicious cycle”) caused by actual and perceived threats to the genitals. (2) Testicular factors may be decisive in various neurotic symptom formations beginning with the early toilet training period. The testicular contribution then takes place along certain preferred pathways of symbolic displacement. (3) Testicular symptoms are observed in many cases of physical and sexual abuse. This finding has application to the treatment of male abuse survivors and to their related sexual dysfunctions. (4) Masturbation involving the testicles is not infrequent in young boys; the most common practice consists of inserting the testes inside the body. (5) The condition of cryptorchism may contribute to psychopathology, especially in the area of masculine self-image; however, cryptorchid boys do not tend to be gender-disordered, effeminate, or prehomosexual. (6) Male body image formation after the phallic stage is a complex emotional and intellectual task involving temporary denial of the inner body and the testicles. Finally, it is suggested that a revised account of male sexuality, including both penis and testicles, is a prerequisite for any psychoanalytic theory of gender.