The Drosophila roX1 gene is X-linked and produces RNAs that are male-specific, somatic, and preferentially expressed in the central nervous system. These RNAs are retained in the nucleus and lack any significant open reading frame. Although all sexually dimorphic characteristics in Drosophila were thought to be controlled by the sex determination pathway through the gene transformer (tra), the expression of roX1 is independent of tra activity. Instead, the dosage compensation system is necessary and sufficient for the expression of roX1. Consistent with a potential function in dosage compensation, roX1 RNAs localize specifically to the male X chromosome. This localization occurs even when roX1 RNAs are expressed from autosomal locations in X-to-autosome translocations. The novel regulation and subnuclear localization of roX1 RNAs makes them candidates for an RNA component of the dosage compensation machinery.