Sexually dimorphic differentiation of gonads is accomplished through balanced interactions between positive and negative regulators. One of the earliest features of gonadal differentiation is the divergent patterning of the vasculature. A male-specific coelomic vessel develops on the anterior to posterior of the XY gonad, whereas this vessel is absent in XX gonads. It is postulated that the testis-determining gene Sry controls formation of the coelomic vessel, but the exact molecular mechanism remains unknown. Here we reveal a novel role for inhibin beta B in establishing sex-specific gonad vasculature. In the testis, inhibin beta B contributes to proper formation of the coelomic vessel, a male-specific artery critical for testis development and, later in development, hormone transportation. On the other hand, in the ovary, inhibin beta B is repressed by WNT4 and its downstream target follistatin, leading to the absence of the coelomic vessel. When either Wnt4 or follistatin was inactivated, the coelomic vessel appeared ectopically in the XX ovary. However, when inhibin beta B was also removed in either the Wnt4-null or follistatin-null background, normal ovarian development was restored and no coelomic vessel was found. Our results indicate that the sex-specific formation of the coelomic vessel is established by positive components in the testis as well as an antagonizing pathway from the ovary. Inhibin beta B is strategically positioned at the intersection of these opposing pathways.