Analysis of the mechanisms underlying sex determination and sex differentiation in Drosophila has provided evidence for a complex but comprehensible regulatory hierarchy governing these developmental decisions. It is suggested here that the pattern of sexual differentiation and dosage compensation characteristic of the male is a default regulatory state. Recent results have provided, in addition, some surprising and intriguing conclusions: (1) that several of the critical controlling genes produce more transcripts than was predicted from the genetic analyses; (2) that setting of (...) the alternative sex‐specific states of the doublesex (dsx) locus involves differential transcript processing; and (3) that some aspects of sexual differentation require the prolonged action of certain elements of the regulatory hierarchy. These findings are discussed in connection with the current model of sex determination in Drosophila. (shrink)