For many creatures, hermaphrodism is the only method of reproduction.
A common misconception about hermaphroditic reproduction is that organisms fertilize their own eggs with their own sperm. In fact, most species do not self-fertilize, and many are physically incapable of self-fertilization. (Bisexual plants are the exception, and some do self-fertilize.) When two simultaneous hermaphrodites, such as two slugs, meet and mate, each one can fertilize the eggs of the other.
True hermaphroditic humans do not exist, but pseudohermaphrodism does, where an individual has both male and female external genital organs, sometimes at the same time.
Human pseudohermaphrodites show functional disturbance of the endocrine glands, especially of the pituitary or adrenal glands, and do not possess two sets of functioning sex organs. Because of the homology between male and female sex organs, it may be difficult to tell whether a human hermaphrodite is a female with overdeveloped clitoris or a male with underdeveloped penis, cleft scrotum, and nondescendant testes. Recently, many persons have undergone surgical or hormone treatment to modify their nonfunctioning sex characteristics and emphasize the sex indicated by those that are functional.