Development of human gonads is a sex-dimorphic process which evolved to produce sex-specific types of germ cells. The process of gonadal sex differentiation is directed by the action of the somatic cells and ultimately results in germ cells differentiating to become functional gametes through spermatogenesis or oogenesis. This tightly controlled process depends on the proper sequential expression of many genes and signalling pathways. Disturbances of this process can be manifested as a large spectrum of disorders, ranging from severe disorders of sex development (DSD) to - in the genetic male - mild reproductive problems within the testicular dysgenesis syndrome (TDS), with large overlap between the syndromes. These disorders carry an increased but variable risk of germ cell neoplasia. In this review, we discuss the pathogenesis of germ cell neoplasia associated with gonadal dysgenesis, especially in individuals with 46,XY DSD. We summarise knowledge concerning development and sex differentiation of human gonads, with focus on sex-dimorphic steps of germ cell maturation, including meiosis. We also briefly outline the histopathology of germ cell neoplasia in situ (GCNIS) and gonadoblastoma (GDB), which are essentially the same precursor lesion but with different morphological structure dependent upon the masculinisation of the somatic niche. To assess the risk of germ cell neoplasia in different types of DSD, we have performed a PubMed search and provide here a synthesis of the evidence from studies published since 2006. We present a model for pathogenesis of GCNIS/GDB in TDS/DSD, with the risk of malignancy determined by the presence of the testis-inducing Y chromosome and the degree of masculinisation. The associations between phenotype and the risk of neoplasia are likely further modulated in each individual by the constellation of the gene polymorphisms and environmental factors.