Sex determination in fetal germ cells depends on a balance between exposure to retinoic acid (RA) and the degradation of RA achieved by the testis-specific expression of the catabolic cytochrome P450 enzyme, CYP26B1. Therefore, identification of factors regulating the expression of the Cyp26b1 gene is an important goal in reproductive biology. We used in situ hybridization to demonstrate that Cyp26b1 and transcription factor genes steroidogenic factor-1 (Sf1) and Sry-related HMG box 9 (Sox9) are coexpressed in Sertoli cells, whereas Cyp26b1 and Sf1 are coexpressed in Leydig cells in mouse fetal testes. In the mouse gonadal somatic cell line TM3, transfection of constructs expressing SOX9 and SF1 activated Cyp26b1 expression, independently of the positive regulator RA. In embryonic gonads deficient in SOX9 or SF1, Cyp26b1 expression was decreased relative to wild-type (WT) controls, as measured by quantitative RT-PCR (qRT-PCR). Furthermore, qRT-PCR showed that Cyp26b1 up-regulation by SOX9/SF1 was attenuated by the ovarian transcription factor Forkhead box L2 (FOXL2) in TM3 cells, whereas in Foxl2-null mice, Cyp26b1 expression in XX gonads was increased∼ 20-fold relative to WT controls. These data support the hypothesis that SOX9 and SF1 ensure the male fate of germ cells by up-regulating Cyp26b1 and that FOXL2 acts to antagonize Cyp26b1 expression in ovaries.—Kashimada, K., Svingen, T., Feng, C.-W., Pelosi, E., Bagheri-Fam, S., Harley, VR, Schlessinger, D., Bowles, J., Koopman, P. Antagonistic regulation of Cyp26b1 by transcription factors SOX9/SF1 and FOXL2 during gonadal development in mice.