Dosage compensation is a process required to balance the expression of X-linked genes between males and females. In Drosophila this is achieved by targeting the dosage compensation complex or the male-specific lethal (MSL) complex to the male X chromosome. In order to study the mechanism of targeting, we have studied two X-chromosomal genes, mof and CG3016, using chromatin immunoprecipitation as well as immuno-FISH analysis on transgenic flies. We show that MSL complex recruitment requires the genes to be in a transcriptionally active state. MSL complex recruitment is reversible because blocking transcription severely reduces MSL binding to its target genes. Furthermore, targeting cues are found toward the 3' end of the gene and depend on the passage of the transcription machinery through the gene, whereby the type of promoter and the direction of transcription are dispensable. We propose a model of dynamic MSL complex binding to active genes based on exposed DNA target elements.