The cascade of molecular events involved in mammalian sex determination has been shown to involve the SRY gene, but specific downstream events have eluded researchers for decades. The current study identifies one of the first direct downstream targets of the male sex determining factor SRY as the basic-helix-loop-helix (bHLH) transcription factor TCF21. SRY was found to bind to the Tcf21 promoter and activate gene expression. Mutagenesis of SRY/SOX9 response elements in the Tcf21 promoter eliminated the actions of SRY. SRY was found to directly associate with the Tcf21 promoter SRY/SOX9 response elements in vivo during fetal rat testis development. TCF21 was found to promote an in vitro sex reversal of embryonic ovarian cells to induce precursor Sertoli cell differentiation. TCF21 and SRY had similar effects on the in vitro sex reversal gonadal cell transcriptomes. Therefore, SRY acts directly on the Tcf21 promoter to in part initiate a cascade of events associated with Sertoli cell differentiation and embryonic testis development.