The Wilms' tumor 1 (WT1) and sex-determining region of the Y chromosome (SRY) genes are essential for development of the mammalian gonads and mutations in these genes are associated with gonadal dysgenesis in humans. The SRY gene encodes a transcription factor with one high-mobility group (HMG) box as a DNA-binding domain. WT1 encodes a transcription factor that contains four contiguous C2H2-type zinc-finger motifs as a DNA/RNA binding or protein-protein interaction domain. Here we report that WT1 binds to and acts synergistically with SRY to activate transcription from a promoter containing SRY-binding sites. This interaction is mediated by the WT1 zinc-finger domain and the SRY HMG box. WT1 mutants associated with Denys-Drash syndrome (DDS), which is characterized by Wilms' tumor, pseudohermaphroditism, and nephropathy, fail to interact with SRY. Wildtype WT1 is recruited to SRY-binding sites in an SRY-dependent manner, whereas DDS mutants are not recruited as efficiently. These results suggest that WT1 forms a complex with SRY to regulate transcription and that this WT1-SRY interaction is important in testis development.