The switch gene, Sex-lethal (Sxl), controls sexual development and dosage compensation. It must be active in females and inactive in males throughout development. Analysis of Sxl cDNAs shows that this on/off regulation may be explained by differential RNA splicing; only female transcripts appear to encode functional products, whereas all male transcripts contain an exon that truncates the open reading frame. The functional female product shows sequence similarities with ribonucleoproteins, suggesting that it is an RNA binding protein. Thus, we propose that Sxl encodes a factor that interacts with both its own pre-mRNA (accounting for positive autoregulation) and that of downstream genes to confer female-specific splicing. In this way, a single, simple mechanism could account for both the maintenance and expression of the sexually determined state.