Differentiation of mouse embryonic germ cells as male or female is dependent on the somatic environment of the gonad rather than the sex chromosome constitution of the germ cell. However, little is known about the initiation of germ cell sexual differentiation. Here, we traced the initiation of germ cell sexual differentiation in XX gonads using the Stra8 gene, which we demonstrate is an early molecular marker of female germ cell development. Stra8 is upregulated in embryonic germ cells of XX gonads prior to meiotic entry and is not expressed in male embryonic germ cells. A developmental time course of Stra8 expression in germ cells of XX gonads has revealed an anterior-to-posterior wave of differentiation that lasts approximately 4 days, from embryonic days 12.5 to 16.5. Consistent with these results, we find that embryonic ovarian germ cells upregulate the meiotic gene Dmc1 and downregulate the Oct4 transcription factor in an anterior-to-posterior wave. In complementary experiments, we find that embryonic XX gonads upregulate certain gene markers of somatic female differentiation in an anterior-to-posterior pattern, while others display a center-to-pole pattern of regulation. Thus, sexual differentiation and meiotic entry of germ cells in embryonic XX gonads progress in an anterior-to-posterior pattern that may reflect local environmental cues that are present in the embryonic XX gonad.