Genome analysis of patients with disorders of sex development, and gain- and loss-of-function studies in mice indicate that gonadal development is regulated by opposing signals. In females, the Wnt/beta-catenin canonical pathway blocks testicular differentiation by repressing the expression of the Sertoli cell-specific gene Sox9 by an unknown mechanism. Using cell and embryonic gonad culture models, we show that activation of the Wnt/beta-catenin pathway inhibits the expression of Sox9 and Amh, whereas mRNA and protein levels of Sry and steroidogenic factor 1 (Sf1), two key transcriptional regulators of Sox9, are not altered. Ectopic activation of Wnt/beta-catenin signaling in male gonads led to a loss of Sf1 binding to the Tesco enhancer and absent Sox9 expression that we also observed in wild-type ovaries. Moreover, ectopic Wnt/beta-catenin signaling induced the expression of the female somatic cell markers, Bmp2 and Rspo1, as a likely consequence of Sox9 loss. Wnt/beta-catenin signaling in XY gonads did not, however, affect gene expression of the steroidogenic Leydig cell Sf1 target gene, Cyp11a1, or Sf1 binding to the Cyp11a1 promoter. Our data support a model in ovary development whereby activation of beta-catenin prevents Sf1 binding to the Sox9 enhancer, thereby inhibiting Sox9 expression and Sertoli cell differentiation.