Dosage compensation is an epigenetic mechanism that normalizes gene expression from unequal copy numbers of sex chromosomes. Different organisms have evolved alternative molecular solutions to this task. In Drosophila melanogaster, transcription of the single male X chromosome is upregulated by twofold in a process orchestrated by the dosage compensation complex. Despite this conceptual simplicity, dosage compensation involves multiple coordinated steps to recognize and activate the entire X chromosome. We are only beginning to understand the intriguing interplay between multiple levels of local and long-range chromatin regulation required for the fine-tuned transcriptional activation of a heterogeneous gene population. This Review highlights the known facts and open questions of dosage compensation in D. melanogaster.