The Wilms' tumor protein Wt1 plays an essential role in mammalian urogenital development. WT1 mutations in humans lead to a variety of disorders, including Wilms' tumor, a pediatric kidney cancer, as well as Frasier and Denys-Drash syndromes. Phenotypic anomalies in Denys-Drash syndrome include pseudohermaphroditism and sex reversal in extreme cases. We have used cDNA microarray analyses on Wt1 knockout mice to identify Wt1-dependent genes involved in sexual development. The gene most dramatically affected by Wt1 inactivation was Amhr2, encoding the anti-Müllerian hormone (Amh) receptor 2. Amhr2 is an essential factor for the regression of the Müllerian duct in males, and mutations in AMHR2 lead to the persistent Müllerian duct syndrome, a rare form of male pseudohermaphroditism. Here we show that Wt1 and Amhr2 are coexpressed during urogenital development and that the Wt1 protein binds to the promoter region of the Amhr2 gene. Inactivation and overexpression of Wt1 in cell lines was followed by immediate changes of Amhr2 expression. The identification of Amhr2 as a Wt1 target provides new insights into the role of Wt1 in sexual differentiation and indicates, in addition to its function in early gonad development and sex determination, a novel function for Wt1, namely, in Müllerian duct regression.