**Core Concept**
Genital swellings in the male embryo play a crucial role in the development of external genitalia. The correct differentiation of these swellings is essential for the formation of the penis and scrotum.

**Why the Correct Answer is Right**
In the male embryo, the genital swellings differentiate into the scrotum due to the presence of dihydrotestosterone (DHT), a potent metabolite of testosterone. The enzyme 5-alpha-reductase converts testosterone into DHT, which then binds to the androgen receptor in the genital swellings, promoting their differentiation into the scrotum. This process is crucial for the formation of the external genitalia in males.

**Why Each Wrong Option is Incorrect**
* **Option A:** This option is incorrect because the genital swellings in males do not differentiate into the penis. The penis develops from the fusion of the genital tubercle and the urethral groove.
* **Option B:** This option is incorrect because the genital swellings in males do not differentiate into the labia majora. The labia majora develop from the genital folds in females.
* **Option C:** This option is incorrect because the genital swellings in males do not differentiate into the labia minora. The labia minora develop from the genital folds in females.

**Clinical Pearl / High-Yield Fact**
Remember that the presence of 5-alpha-reductase deficiency can lead to a condition known as undervirilization, where the genital swellings in males do not differentiate properly, resulting in a condition known as persistent urogenital sinus.

**Correct Answer:** D. Scrotum