Normal male sex differentiation requires that Sertoli cells in the embryonic testes produce Mgllerian inhibiting substance (MIS), a TGFfI-llke hormone that causes Mulledan duct regretion. In primary Sertoli cells, the orphan nuclear receptor, steroidogenic factor 1 (SF-l), regulates the MIS gene by binding to a conserved upstream regulatory element. In heterologous (HeLa) cells, MIS gene actlvatlon by SF-l requires removal of the SF-1 llgand-binding domaln, implicating a Settoll cell-speclffc ligand or cofactor. Finally, the sexually dimorphic expression of SF-1 during development coincides with MIS expression and Mullerfan duct regression. We propose that SF-1 regulates MIS In vivo and participates directly in the process of mammalian sex determination.