Disorders of sex development (DSD), previously known as intersex, refer to congenital conditions in which development of chromosomal, gonadal, or anatomical sex is atypical. Patients with specific variants of this disorder have an elevated risk for the development of so-called type II germ cell cancers, i.e., the seminomatous and nonseminatous tumors, referred to as germ cell tumors (GCTs). Specifically DSD patients with gonadal dysgenesis or hypovirilization are at risk. A prerequisite for type II GCT formation is the presence of a specific part of the Y chromosome (referred to as the GBY region), with the TSPY gene being the most likely candidate. Also the octamer binding transcription factor OCT3/4 is consistently expressed in all type II GCTs with pluripotent potential, as well as in the precursor lesions carcinoma in situ (CIS) in case of a testis and gonadoblastoma (GB) in the DSD gonad. The actual risk for malignant transformation in individual DSD patients is hard to predict, because of confusing terminology referring to the different forms of DSD, and unclear criteria for identification of the presence of malignant germ cells, especially in young patients. This is specifically due to the phenomenon of delay of germ cell maturation, which might result in over diagnosis. This review will give novel insight into the pathogenesis of the type II GCTs through the study of patients with various forms of DSD for which the underlying molecular defect is known. To allow optimal understanding of the pathogenesis of this type of cancers, first normal gonadal development, especially regarding the germ cell lineage, will be discussed, after which type II GCTs will be introduced. Subsequently, the relationship between type II GCTs and DSD will be described, resulting in a number of new insights into the development of the precursor lesions of these tumors.