Hydroxysteroid (17beta) dehydrogenases (HSD17Bs) belong to the short chain dehydrogenase/ reductase (SDR) family consisting of diverse pool of enzymes with oxidoreductase activity. HSD17B enzymes catalyze the conversion between 17-keto and 17-hydroxy steroids, either activating or inactivating sex steroids. Previous studies have demonstrated a role for human HSD17B1 enzyme in estradiol biosynthesis both in gonads and extra-gonadal steroid target tissues and various estrogen-dependent diseases. In present study, five transgenic mouse lines universally over-expressing human HSD17B1 were generated and characterized at fetal and adult age, especially to study the enzyme function in vivo. Activity measurements in vivo indicated that in addition to activating estrone to estradiol, the enzyme is able to significantly reduce androstenedione to testosterone, and transgenic females presented increased testosterone concentration preceding birth. As a consequence, transgenic females suffered from several phenotypic features typical to enhanced fetal androgen exposure. Furthermore, the ovaries developed androgen-dependent ovarian benign serous cystadenomas at adulthood. Androgen dependency of the phenotypes was confirmed by rescuing them by anti-androgen treatment, or by transplanting wild type ovaries to the transgenic females. In conclusion, the data evidently show that in addition to activating estrone to estradiol, human HSD17B1 enhances androgen action in vivo. Thus, the relative amount of androgenic and estrogenic substrates available partially determines the physiological function of the enzyme in vivo. The novel function observed for human HSD17B1 is likely to open new possibilities also for the use of HSD17B1-inhibitors as drugs against androgen related dysfunctions in females.