Board Thread:Lore Discussion/@comment-11345660-20130908095939/@comment-9887604-20130910001341

The Khajiit are potentially descended from the same species as all of the other races. There is evidence in the Khajiit creation myth, and the pocket guide to the empire that they are descendants of Aldmer, or farther back the Ehlnofey. There could be very much shared genetic material in their history. Their physical form is possibly tied to their responsibility.

Just because a creature is called a beastman does not make it by virtue a beast. The Orsimer are throughout much propaganda called beastmen, however they are 100% descendents of Aldmer and thus genetically compatible with other races.

The Argonians on the other hand are a bit different, they owe their sentience to the Hist. There is a relation between the Hist sap, complete magical interference can be assumed, and the human like characteristics they can take on. The Hist can genetically alter even after birth the characteristics of Argonians, during the Oblivion Crisis the Argonians were not only called back to Argonia they were genetically modified to combat the invading the Daedra, the evidence for this is in the Lord of Souls book. It would stand to reason that perhaps they can and have modified the Argonians for other purposes, perhaps inter breeding.