N(6)-methyladenosine (m(6)A) is the most common internal modification of eukaryotic messenger RNA (mRNA) and is decoded by YTH domain proteins. The mammalian mRNA m(6)A methylosome is a complex of nuclear proteins that includes METTL3 (methyltransferase-like 3), METTL14, WTAP (Wilms tumour 1-associated protein) and KIAA1429. Drosophila has corresponding homologues named Ime4 and KAR4 (Inducer of meiosis 4 and Karyogamy protein 4), and Female-lethal (2)d (Fl(2)d) and Virilizer (Vir). In Drosophila, fl(2)d and vir are required for sex-dependent regulation of alternative splicing of the sex determination factor Sex lethal (Sxl). However, the functions of m(6)A in introns in the regulation of alternative splicing remain uncertain. Here we show that m(6)A is absent in the mRNA of Drosophila lacking Ime4. In contrast to mouse and plant knockout models, Drosophila Ime4-null mutants remain viable, though flightless, and show a sex bias towards maleness. This is because m(6)A is required for female-specific alternative splicing of Sxl, which determines female physiognomy, but also translationally represses male-specific lethal 2 (msl-2) to prevent dosage compensation in females. We further show that the m(6)A reader protein YT521-B decodes m(6)A in the sex-specifically spliced intron of Sxl, as its absence phenocopies Ime4 mutants. Loss of m(6)A also affects alternative splicing of additional genes, predominantly in the 5' untranslated region, and has global effects on the expression of metabolic genes. The requirement of m(6)A and its reader YT521-B for female-specific Sxl alternative splicing reveals that this hitherto enigmatic mRNA modification constitutes an ancient and specific mechanism to adjust levels of gene expression.