Germany has become Europe's first country to allow babies with characteristics of both sexes to be registered as neither male nor female.
Parents are now allowed to leave the gender blank on birth certificates, in effect creating a new category of "indeterminate sex".
The move is aimed at removing pressure on parents to make quick decisions on sex assignment surgery for newborns.
However, some campaigners say the new law does not go far enough.
As many as one in 2,000 people have characteristics of both sexes.
They are known as "intersex" people because they have a mixture of male and female chromosomes or even genitalia which have characteristics of both genders.
The intense difficulty for parents is often that a gender has to be chosen very quickly so that the new child can be registered with the authorities, the BBC's Steve Evans in Berlin reports.
Sometimes surgery is done on the baby to turn its physical characteristics as far as possible in one direction or the other, our correspondent says.
The law in Germany has been changed following a review of cases which revealed great unhappiness.
In one case, a person with no clear gender-defining genitalia was subjected to surgery. The person said many years later: "I am neither a man nor a woman. I will remain the patchwork created by doctors, bruised and scarred."
German passports, which currently list the holder's sex as M for male or F for female, will have a third designation, X, for intersex holders, according to the interior ministry.
