Dosage compensation refers to the phenomenon that despite the difference in copy number of X chromosomes in males and females approximately equal expression results from the sex chromosomes. We describe evidence for a model that dosage compensation is caused by an 'inverse dosage effect' that results from an altered stoichiometry of transcriptional regulators on the X versus the autosomes. This imbalance of regulators would cause a two-fold increase in target gene expression throughout the genome in the absence of any modification. The two-fold hyperactivation compensates the X chromosome. However, the MSL (male specific lethal) complex modifies this effect on the autosomes, which would otherwise double their expression, by becoming sequestered to the X chromosome together with a histone acetylase (MOF) and kinase (JIL1). This situation reduces the level of histone 4 Lys16 acetylation and H3 phosphorylation on the autosomes, thus bringing their expression down to near the female level. The presence of the MSL complex on the X modifies chromatin in such a manner that it counteracts any impact of increased histone acetylation and phosphorylation on gene expression. This situation fosters the proper two-fold increase in gene expression needed for X chromosomal dosage compensation in males and reduces the inverse effect on the autosomes to equalize gene expression throughout the genome for the two sexes.