The tra-1 gene plays a central role in C. elegans sex determination. XX animals develop as hermaphrodites when tra-1 is active and as males when it is not. By analyzing a large number of tra-1 genetic mosaics we have shown that, with the expected exception of vulval induction by the hermaphrodite gonad, tra-1 functions cell-autonomously, consistent with a role as an intracellular component of a signaling pathway. Moreover, all the sexual differentiation genes under tra-1 control must also function cell-autonomously. Our results have additional implications for several aspects of postembryonic development, including mechanisms of sex-specific directed cell migrations and the question of an organizer in the male tail.