In Drosophila melanogaster, sex determination and dosage compensation are under the control of the Sex-lethal (Sxl) gene. We have identified a gene, female-lethal-2-d (fl(2)d), located in the second chromosome, that interacts with Sxl. fl(2)d homozygous clones, induced during the larval stage of fl(2)d/+ females, develop male structures instead of female ones. fl(2)d homozygous females hypertranscribe their two X chromosomes, as measured by comparing the level of the X-linked sgs-4 transcript, which is dosage compensated, with that of the autosomal sgs-3 transcript. Thus, with respect to the processes of sex determination and dosage compensation, loss-of-function mutations at the fl(2)d and at the Sxl genes are equivalent. Moreover, fl(2)d homozygous female larvae express the Sxl transcripts characteristic of males. These results indicate that the fl(2)d gene is needed for the sex-specific splicing pattern of the Sxl RNA that occurs in females, thus suggesting the involvement of the fl(2)d gene in the positive autoregulatory pathway of Sxl.