To further elucidate the roles of germ cells in the sex differentiation of gonads, we have used the medaka, a teleost fish, to generate mutants that lack germ cells from the onset of gonadogenesis by the morpholino-mediated knockdown of cxcr4. The resulting germ-cell-deficient medaka show female-to-male sex reversal of their secondary sex characteristics, accompanied by increased levels of androgen and reduced levels of estrogen. A failure to maintain granulosa cells or estrogen-producing cells also occurs at early stages of sex differentiation in the cxcr4 morphants, before the initiation of gonadal morphogenesis. In contrast, androgen-producing cells are unaffected in germ-cell-deficient medaka of either sex. In addition, a single tube-like gonad that expresses male-specific genes is formed in these mutants irrespective of the genetic sex. Significantly, each of these mutant phenotypes occurs in a somatic cell-autonomous manner, suggesting that gonadal somatic cells are predisposed toward male development in the absence of germ cells. This highlights the importance of germ cells in the sexual dimorphism of the gonads.