C57BL/6J mice carrying a Mus domesticus poschiavinus Y chromosome (YPOS) develop as females with ovarian tissue or as hermaphrodites with ovarian and testicular tissue. We tested the hypothesis that the Y-linked component of this inherited sex reversal is caused by the M. d. poschiavinus Y-linked testis determining gene (symbolized Tdy or Sry) by examining gonadal development in C57BL/6J XYPOS mice carrying a M. musculus allele of Sry as a transgene. We found that in the presence of the transgene, XYPOS mice developed exclusively testicular tissue. This result indicates that the Sry allele carried on the YPOS chromosome is responsible for development of ovarian tissue in the C57BL/6J inbred strain background. We discuss this finding in light of DNA polymorphisms present in Sry alleles carried by various M. domesticus and M. musculus Y chromosomes. In addition, we present a hypothesis concerning the timing of expression of the testicular and ovarian determining genes in the developing fetal gonad based on the organization of ovarian and testicular tissue in ovotestes.