Digit ratio (2D:4D) denotes the relative length of the second and fourth digits. This ratio is considered to be a biomarker of the balance between fetal testosterone (T) and estrogen (E) in a narrow window of early ontogeny. Evidence for this assertion is derived from direct and indirect measures of prenatal hormonal exposure (in experimental animals, via amniotic fluid samples and in the study of sex-typical traits) in relation to 2D:4D. In contrast, the relationships between 2D:4D and levels of sex steroids in adults are less clear, as many correlational studies of 2D:4D and adult sex steroids have concluded that this association is statistically non-significant. Here, we suggest that in order to understand the link between 2D:4D and sex hormones, one must consider both fetal organizing and adult activating effects of T and E. In particular, we hypothesize that 2D:4D correlates with organizing effects on the endocrine system that moderate activating effects in adulthood. We argue that this is particularly evident in “challenging” conditions such as aggressive and sexual encounters, in which individuals show increased levels of T. We discuss this refinement of the 2D:4D paradigm in relation to the links between 2D:4D and sports performance, and aggression.