Acetylation of histone H4 at lysine 16 (H4K16) modulates nucleosome-nucleosome interactions and directly affects nucleosome binding by certain proteins. In Drosophila, H4K16 acetylation by the dosage compensation complex subunit Mof is linked to increased transcription of genes on the single X chromosome in males. Here, we analyzed Drosophila containing different H4K16 mutations or lacking Mof protein. An H4K16A mutation causes embryonic lethality in both sexes, whereas an H4K16R mutation permits females to develop into adults but causes lethality in males. The acetyl-mimic mutation H4K16Q permits both females and males to develop into adults. Complementary analyses reveal that males lacking maternally deposited and zygotically expressed Mof protein arrest development during gastrulation, whereas females of the same genotype develop into adults. Together, this demonstrates the causative role of H4K16 acetylation by Mof for dosage compensation in Drosophila and uncovers a previously unrecognized requirement for this process already during the onset of zygotic gene transcription.