In Caenorhabditis elegans, an X chromosome-counting mechanism specifies sexual fate. Specific genes termed X-signal elements, which are present on the X chromosome, act in a concerted dose-dependent fashion to regulate levels of the developmental switch gene xol-1. In turn, xol-1 levels determine sexual fate and the activation state of the dosage compensation mechanism. The crystal structure of the XOL-1 protein at 1.55 A resolution unexpectedly reveals that xol-1 encodes a GHMP kinase family member, despite sequence identity of 10% or less. Because GHMP kinases, thus far, have only been characterized as small molecule kinases involved in metabolic pathways, for example, amino acid and cholesterol synthesis, XOL-1 is the first member that controls nonmetabolic processes. Biochemical investigations demonstrated that XOL-1 does not bind ATP under standard conditions, suggesting that XOL-1 acts by a mechanism distinct from that of other GHMP kinases. In addition, we have cloned a XOL-1 ortholog from Caenorhabditis briggsae, a related nematode that diverged from C. elegans approximately 50-100 million years ago. These findings demonstrate an unanticipated role for GHMP kinase family members as mediators of sexual differentiation and dosage compensation and, possibly, other aspects of differentiation and development.