Dog pheromones are chemicals that are secreted externally (as opposed to hormones which are secreted inside a dog's body). They are believed to work through smell, and influence the way a group of dogs integrate and relate to each other. They are likely to be a factor in fighting and aggressiveness.

Whilst not completely understood, some researchers believe dogs release pheromones in their urine and feces, and possibly in their breath when they exhale, as well as from glands beneath the skin at the base of the tail and on the pads of the dog's feet.

If this is true, it would explain why aggressive dogs are often compulsive urine sniffers and markers. It would also explain why they are less aggressive when their owners do not allow them to sniff or mark.

Dog pheromones can act as a trigger to aggressive behaviour. For example, when a dog seems to sense, through smell, another dog that they feel is a threat. Or the case of aggressive dogs that bite marking a strange (to them) territory with their own pheromones before they attack. This can occur in their home territory as well.

Owners can try restricting the problem dog's urinating/marking to one area of his own yard. This tends to reduce the dog's aggressiveness, as well as lower his tendency to urinate in the house. 

More information on pheromones and mammals here: http://www.hhmi.org/senses/d230.html