The doublesex (dsx) gene regulates somatic sexual differentiation in both sexes in Drosophila melanogaster. dsx has active but opposite negative regulatory functions in males and females. In males, the dsx locus represses the genes responsible for female sexual differentiation; male differentiation functions, not being repressed, are expressed. Conversely, in females, the dsx locus represses the genes involved in male sexual differentiation and the female sexual differentiation functions, not being repressed, are expressed. We have molecularly cloned the dsx locus by chromosomal walking and localized the gene within the cloned region by determining the positions of breakpoints of chromosomal rearrangements broken in dsx and in closely flanking regions. The dsx locus is about 40 kb in size. Its DNA is unique and appears to be organized in the same way in genomes of males and females. There is a developmentally and sexually regulated set of transcripts produced by the dsx locus. During the larval period, two sex-nonspecific dsx transcripts are produced. At the end of the larval period, these transcripts disappear and are replaced by a set of male-specific and female-specific transcripts. In adults, an additional male-specific transcript appears. Because genetic analysis has shown that transcription of the dsx locus must occur during the pupal period for proper sexual differentiation, we infer that the sex-specific transcripts seen during the pupal period correspond to the sex determination regulatory functions defined by mutational analysis. The regulation of dsx expression and possible roles of the other dsx transcripts are discussed.