The Nile tilapia, a gonochoristic teleost fish with an XX/XY sex-determining system, provides an excellent model for studying gonadal sex differentiation because genetic all-females and all-males are available. In this study, we used quantitative real-time RT-PCR to determine the precise timing of the gonadal expression of 17 genes thought to be associated with gonadal sex differentiation in vertebrates. Gonads were isolated from all-female and all-male tilapia before (5–15 days after hatching [dah]) and after (25–70 dah) morphological sex differentiation. The transcript of aromatase (cyp19a1a), an enzyme responsible for producing estradiol-17beta, was expressed only in XX gonads at 5 dah, with a marked elevation in expression thereafter. In contrast, mRNA expression of steroid 11beta-hydroxylase (cyp11b2), an enzyme responsible for the synthesis of 11-ketotestosterone (11-KT, a potent androgen in fish), was found in XY gonads from 35 dah only. These results, combined with the presence of transcripts for other steroidogenic enzymes and estrogen receptors in XX gonads at 5–7 dah, are consistent with our earlier suggestion that estradiol-17beta plays a critical role in ovarian differentiation in tilapia, whereas a role for 11-KT in testicular differentiation is questionable. A close relationship between the expression of foxl2, but not nr5a1 (Ad4BP/SF-1), and that of cyp19a1a in XX gonads suggests an important role for Foxl2 in the transcriptional regulation of cyp19a1a. Dmrt1 exhibited a male-specific expression in XY gonads from 6 dah onward, suggesting an important role for Dmrt1 in testicular differentiation. Sox9 and amh (anti-Mullerian hormone) showed a testis-specific expression, being evident only in the later stages of testicular differentiation. It is concluded that the sex-specific expression of foxl2 and cyp19a1a in XX gonads and dmrt1 in XY gonads during early gonadal differentiation (5–6 dah) is critical for undifferentiated gonads to differentiate into either the ovary or testis in the Nile tilapia.