Sex-reversal cases in humans and genetic models in mice have revealed that the fate of the bipotential gonad hinges upon the balance between pro-testis SOX9 and pro-ovary beta-catenin pathways. Our central query was: if SOX9 and beta-catenin define the gonad's identity, then what do the gonads become when both factors are absent? To answer this question, we developed mouse models that lack either Sox9, beta-catenin, or both in the somatic cells of the fetal gonads and examined the morphological outcomes and transcriptome profiles. In the absence of Sox9 and beta-catenin, both XX and XY gonads progressively lean toward the testis fate, indicating that expression of certain pro-testis genes requires the repression of the beta-catenin pathway, rather than a direct activation by SOX9. We also observed that XY double knockout gonads were more masculinized than their XX counterpart. To identify the genes responsible for the initial events of masculinization and to determine how the genetic context (XX vs. XY) affects this process, we compared the transcriptomes of Sox9/beta-catenin mutant gonads and found that early molecular changes underlying the XY-specific masculinization involve the expression of Sry and 21 SRY direct target genes, such as Sox8 and Cyp26b1. These results imply that when both Sox9 and beta-catenin are absent, Sry is capable of activating other pro-testis genes and drive testis differentiation. Our findings not only provide insight into the mechanism of sex determination, but also identify candidate genes that are potentially involved in disorders of sex development.