During sex determination, the sisterlessA (sisA) gene functions as one of four X:A numerator elements that set the alternative male or female regulatory states of the switch gene Sex-lethal. In somatic cells, sisA functions specifically in sex determination, but its expression pattern also hints at a role in the yolk cell, a syncytial structure believed to provide energy and nutrients to the developing embryo. Previous studies of sisA have been limited by the lack of a null allele, leaving open the possibility that sisA has additional functions. Here we report the isolation and molecular characterization of four new sisA alleles including two null mutations. Our findings highlight key aspects of sisA structure-function and reveal important qualitative differences between the effects of sisA and the other strong X:A numerator element, sisterlessB, on Sex-lethal expression. We use genetic, expression, clonal, and phenotypic analyses to demonstrate that sisA has an essential function in the yolk nuclei of both sexes. In the absence of sisA, endoderm migration and midgut formation are blocked, suggesting that the yolk cell may have a direct role in larval gut development. To our knowledge, this is the first report of a requirement for the yolk nuclei in Drosophila development.