I have 3 boys, and my oldest, 5 went through this, and my 3 yr old is entering this phase. It's natural, but I emphasize that their penises are for potty, not playing. Yes, it's a natural urge, and at their age they are innocent, but I most certainly will not teach my boys it's ok to do even in private. Definitely do not try to shame him or make him feel like he's being bad - gently remind him "hands", then redirect his attention and help him occupy his hands with something else. Play with playdoh, color, cook together, play cars, blow bubbles outside, anything involving the hands =) It tends to happen more when they are bored. Also, have you talked with his mother? Ask if she has talked to him about it and what does she do? I wouldn't worry - this too shall pass.