The paucity of polymorphisms in single-copy genes on the Y chromosome of Drosophila contrasts with data indicating that this chromosome has polymorphic phenotypic effects on sex ratio, temperature sensitivity, behavior, and fitness. We show that the Y chromosome of D. melanogaster harbors substantial genetic diversity in the form of polymorphisms for genetic elements that differentially affect the expression of hundreds of X-linked and autosomal genes. The affected genes are more highly expressed in males, more meagerly expressed in females, and more highly divergent between species. Functionally, they affect microtubule stability, lipid and mitochondrial metabolism, and the thermal sensitivity of spermatogenesis. Our findings provide a mechanism for adaptive phenotypic variation associated with the Y chromosome.