The process of gonadal development and mechanism involved in sex differentiation in eels are still unclear. The objectives were to investigate the gonadal development and expression pattern of sex-related genes during sex differentiation in the Japanese eel, Anguilla japonica. For control group, the elvers of 8–10 cm were reared for 8 months; and for feminization, estradiol-17β (E2) was orally administered to the elvers of 8–10 cm for 6 months. Only males were found in the control group, suggesting a possible role of environmental factors in eel sex determination. In contrast, all differentiated eels in E2-treated group were female. Gonad histology revealed that control male eels seem to differentiate through an intersexual stage, while female eels (E2-treated) would differentiate directly from an undifferentiated gonad. Tissue distribution and sex-related genes expression during gonadal development were analyzed by qPCR. The vasa, figla and sox3 transcripts in gonads were significantly increased during sex differentiation. High vasa expression occurred in males; figla and sox3 were related to ovarian differentiation. The transcripts of dmrt1 and sox9a were significantly increased in males during testicular differentiation and development. The cyp19a1 transcripts were significantly increased in differentiating and differentiated gonads, but did not show a differential expression between the control and E2-treated eels. This suggests that cyp19a1 is involved both in testicular differentiation and development in control males, and in the early stage of ovarian differentiation in E2-treated eels. Importantly, these results also reveal that cyp19a1 is not a direct target for E2 during gonad differentiation in the eel.