The housefly, Musca domestica, is an excellent model system to study the diversification of the pathway that specifies the sexual fate. A number of different mechanisms have been described in the housefly, which reflects in part the broad diversity of sex-determining strategies used in insects. In this study we present the molecular identification and characterization of F, which acts as the master switch in the housefly pathway. We provide evidence that F corresponds to the transformer ortholog in Musca (Mdtra), which, as a result of alternative processing, expresses functional products only in individuals committed to the female fate. We demonstrate that, once activated, a self-sustaining feedback loop will maintain the female-promoting functions of Mdtra. Absence of Mdtra transcripts in eggs of Arrhenogenic (Ag) mutant females suggests that maternally deployed Mdtra activity initiates this self-sustaining loop in the zygote. When an M factor is paternally transmitted to the zygote, the establishment of the loop is prevented at an early stage before cellularization and splicing of Mdtra shifts irreversibly to the male nonproductive mode. On the basis of the analysis of two mutant alleles we can explain the different sex-determining systems in the housefly largely as deviations at the level of Mdtra regulation. This plasticity in the housefly pathway may provide a suitable framework to understand the evolution of sex-determining mechanisms in other insect species. For instance, while sex determination in a close relative, the tsetse fly Glossina morsitans, differs at the level of the instructive signal, we find that its tra ortholog, Gmtra, is regulated in a mode similar to that of Mdtra.