Recently I’ve been in an awkward situation with ssh and X11 forwarding, where ssh using the classic -Y or -X option wasn’t working (DISPLAY was not set):

[andrea@duncan ~]$ ssh -Y root@thufir
root@thufir's password:
Last login: Sat Apr 12 23:30:09 2008 from ***
[root@thufir ~]# echo $DISPLAY
[root@thufir ~]#

If you are experiencing the same and your sshd_config looks fine (which means TCP and X11 forwarding are already enabled) then the answer is missing xauth!

On RedHat yum install xauth will do the trick