The understanding of sex determination is a fundamental goal in the study of eukaryotic developmental genetics. The mechanisms governing the generation of sexual dimorphism have been well characterized in Drosophila because of its amenability to both genetic manipulation and the application of the techniques of modern molecular genetics. By using classical genetics to search for sex-transforming mutations and by analysing their phenotypes and how they interact, a picture has emerged involving a cascade of regulatory genes. The primary sex determining signal--the ratio of the number of X chromosomes to the number of sets of autosomes--sets this cascade into motion. Genetic evidence has suggested that the intervening genes in this pathway are active in females but not in males, whereas the final gene has active but opposing roles in the two sexes. This bifunctional locus is responsible for the repression of female differentiation genes in males and male differentiation genes in females. The cloning of the key genes of the regulatory cascade and the study of their transcription patterns have revealed that their different functional states in the two sexes do not result from control at the transcriptional level, as might have been expected. Instead, common primary transcripts are produced in male and female flies; these are then differentially spliced to encode sex-specific gene products. In this paper we focus on the contributions of molecular genetics to the understanding of sex determination. Sufficient background is included for the reader to see how the models of the Drosophila sex determination system were first developed. We then show how the application of new technology has complemented the genetic approach and refined our understanding of the system. Current intensive research in this area should lead within the next few years to definitive knowledge at the molecular level of the cascade of differential splicing of regulatory genes, and how this hierarchy ultimately gives rise to the appropriate sex-specific patterns of structural gene expression that underlie sexual dimorphism.