It has been proposed that the mammalian adrenal cortex and gonad are derived from the same primordium present during early urogenital development. Molecular pathways involved in the differentiation of the adrenal cortex from the adrenogonadal primordium (AGP) have yet to be determined. Here we show in mice that the transcription co-factor Cited2 is required for the specification of the adrenal cortex from the AGP. We present genetic and molecular evidence demonstrating that Cited2 interacts with the transcription factor Wt1 to stimulate expression of the nuclear hormone receptor Sf-1 (Nr5a1) in the AGP prior to the separation between gonad and adrenal cortex. We show a direct correlation between the expression levels of Sf-1 in the AGP and the defects in adrenal development found in mice with different Cited2 and Wt1 mutant backgrounds. Analysis of embryos heterozygous for mutations in both Sf-1 and Cited2 confirmed that these genes act in the same pathway during adrenal development. Our studies reveal a regulatory mechanism in which Cited2 acts as a Wt1 co-factor to increase, at a critical time in embryogenesis, the levels of the essential transcription factor Sf-1 in the AGP above the threshold required to determine adrenal development. These results highlight the importance of transcription factor dosage in organogenesis and the role of transcription co-factors such as Cited2 in determining the levels of these factors.