17-beta-Hydroxysteroid dehydrogenase type 3(17 beta HSD-3) is present almost exclusively in the testes, and converts androstenedione (A) to testosterone (T). 17 beta HSD-3 deficiency is rare. The diagnosis can be missed in early childhood as the clinical presentation may be subtle. The most frequent presentation of 17 HSD-3 deficiency is a 46,XY individual with female external genitalia, labial fusion and a blind ending vagina, with or without clitoromegaly. A low testosterone/androstenedion (T/A) ratio is suggestive of 17 beta HSD-3 deficiency, and such diagnosis can be confirmed with molecular genetic studies. A 12-day newborn was referred to our hospital because of palpable gonads in the labia majora. On physical examination, the baby had female external genitalia and palpable gonads in the labia majora. T/A ratio was 0.26 and the diagnosis was 17 beta HSD-3 deficiency, which was confirmed by the evidence of compound heterozygousity novel frameshift mutations in exon 9 and 10 of HSD17B3 gene.