Previous genetic studies indicated intersex (ix) functions only in females and that it acts near the end of the sex determination hierarchy to control somatic sexual differentiation in Drosophila melanogaster. We have cloned ix and characterized its function genetically, molecularly and biochemically. The ix pre-mRNA is not spliced, and ix mRNA is produced in both sexes. The ix gene encodes a 188 amino acid protein, which has a sequence similar to mammalian proteins thought to function as transcriptional activators, and a Caenorhabditis elegans protein that is thought to function as a transcription factor. Bringing together the facts that (1) the ix phenotype is female-specific and (2) functions at the end of the sex determination hierarchy, yet (3) is expressed sex non-specifically and appears likely to encode a transcription factor with no known DNA-binding domain, leads to the inference that ix may require the female-specific protein product of the doublesex (dsx) gene in order to function. Consistent with this inference, we find that for all sexually dimorphic cuticular structures examined, ix and dsx are dependent on each other to promote female differentiation. This dependent relationship also holds for the only known direct target of dsx, the Yolk protein (Yp) genes. Using yeast 2-hybrid assay, immunoprecipitation of recombinant tagged IX and DSX proteins from Drosophila S2 cell extracts, and gel shifts with the tagged IX and DSX(F) proteins, we demonstrate that IX interacts with DSX(F), but not DSX(M). Taken together, the above findings strongly suggest that IX and DSX(F) function in a complex, in which IX acts as a transcriptional co-factor for the DNA-binding DSX(F).