The early bi-potential mammalian gonad requires the expression of a Y-linked gene, Sry, during a brief window of time to ensure proper testis development. WT1 and its direct target gene Sf1 function during sex determination as well as in the specified testes and ovaries. We have previously shown that the transcription co-factor CITED2 interacts with WT1 to stimulate the expression of Sf1 in the adrenogonadal primordium to ensure adrenal development. We now show through genetic interactions and expression analyses that Cited2 acts in the gonad with Wt1 and Sf1 to increase the expression of Sry levels to attain a critical threshold to efficiently initiate testis development. Reducing the gene dosage of Wt1 or Sf1 in Cited2 mutant gonads was sufficient to produce partial XY sex reversal while full sex reversal was attained in mutants containing a hypomorphic Sry(POS) allele. A direct correlation was observed between XY sex reversal and reduced expression levels of Sry and Sf1 during sex determination, which indicated that Sry is a downstream target of the CITED2/WT1/SF1 regulatory pathway. Our results provide in vivo evidence for the identification of the first transcription co-factor to function during mammalian sex determination, as part of the WT1/SF1 regulatory mechanism. This highlights the gene dosage sensitivity of the pathway's effect on Sry levels and embryonic gonad development.