Wrongful of information.
Technical term is Hermaphrodite
Answer chosen from Yahoo! Answers:
Normally, men have an one X and one Y chromosome, but sometimes a person can have two X's and one Y chromosomes. A famous example would be John Wayne Gacy, the serial killer. These men may develop breasts and have a very small penis commonly referred to as a micropenis (its may be more like a large clitoris by its appearance).
Another way a person can be hermaphroditic would be if their mother was exposed to high levels of certain hormones during her pregnancy. Women were once prescribed progesterone during pregnancy in the belief that it would prevent miscarriages, but it ended up causing female babies to differentiate male sex organs! This is because progesterone can act similarly to the "male" hormone testosterone. Quite tragic.
Perhaps the most interesting type of hermaphrodism occurs when a baby is born male but lacks an enzyme known as 5-alpha-reductase. This enzyme normally transforms testosterone into its most active form: 5-alpha-dihydrotestosterone (quite a mouthful to speak). Without the enzyme, the testosterone remains in its weaker form, and much of it is converted into estrogen instead. As a result, when the baby comes out, it looks just like a girl. The child lives its life as a girl until it reaches puberty, but is usually horrified when its clitoris enlarges, developing into a penis. The penis never fully develops, and the result is what you may refer to as a "shemale".
The same condition has been brought about by exposure to high levels of estrogen during pregnancy. This would usually come about by having the mother exposed to estrogen-containing birth control while she was pregnant.
A famous case exist where during one boys circumcision, most of his penis was accidentally cut off, and his parents and doctors decided to turn him into a girl rather than have him live with the mangled remains of his penis. When the child found out later in life, he decided to have a sex change operation and was changed back into boy.
Human hermaphrodism is a fascinating subject, though often tragic.