In Drosophila, the sex of germ cells is determined by autonomous and inductive signals. Somatic inductive signals can drive XX germ cells into oogenesis or into spermatogenesis. An autonomous signal makes XY germ cells male and unresponsive to sex determination by induction. The elements forming the X:A ratio in the soma and the genes tra, tra2, dsx, and ix that determine the sex of somatic cells have no similar role in the germline. The gene Sxl, however, is required for female differentiation of somatic and germ cells. Inductive signals that are dependent on somatic tra and dsx expression already affect the sex-specific development of germ cells of first instar larvae. At this early stage, however, germline expression of Sxl does not appear to affect the sexual characteristics of germ cells. Since inductive signals dependent on tra and dsx nevertheless influence the choice of sex-specific splicing of Sxl, it can be concluded that Sxl is a target of the inductive signal, but that its product is required late for oogenesis. Other genes must therefore control the early sexual dimorphism of larval germ cells.