Someone put this on here a few years ago and I copied and saved it for when my DD asks the question. I think it's a really good explanation-
Where babies come from
To make a baby, you need a seed from a man, an egg from a woman and the special bit in a woman's tummy called a womb.
Usually, the baby's daddy gives the seed and the babys mummy gives the egg and womb, and they all live together as a family.
Sometimes the mummy and daddy don't live together and so the baby can have two houses! Sometimes the baby only lives with one parent. Sometimes the people who first made the baby can't be a mummy and daddy so the baby gets new parents.
Sometimes two ladies are in love and so a kind man gives them a seed, or maybe two men find a kind lady to give them an egg and let them use her womb.
Sometimes the mummy or daddy need a kind person to give eggs or seeds or let them use their womb because the mummy or daddy have a problem with theirs.
Sometimes a woman and a man even make a baby by accident! When you grow big enough to make a baby, you can get medicine that stops you having a baby until you want one.
All sorts of different things happen, and babies end up in all sorts of families, isn't that lovely!
No matter what, there always needs to be an egg, a seed, a womb and someone to love the baby, but there are lots of ways to do that, just like there are lots of different families.