In both Drosophila melanogaster and Caenorhabditis elegans somatic sex determination, germline sex determination, and dosage compensation are controlled by means of a chromosomal signal known as the X:A ratio. A variety of mechanisms are used for establishing and implementing the chromosomal signal, and these do not appear to be similar in the two species. Instead, the study of sex determination and dosage compensation is providing more general lessons about different types of signaling pathways used to control alternative developmental states of cells and organisms.