Male-specific expression of the protein male-specific-lethal 2 (MSL-2) controls dosage compensation in Drosophila. msl-2 gene expression is inhibited in females by Sex-lethal (SXL), an RNA binding protein known to regulate pre-mRNA splicing. An intron present at the 5' untranslated region (UTR) of msl-2 mRNA contains putative SXL binding sites and is retained in female flies. Here we show that SXL plays a dual role in the inhibition of msl-2 expression. Cotransfection of Drosophila Schneider cells with an SXL expression vector and a reporter containing the 5' UTR of msl-2 mRNA resulted in retention of the 5' UTR intron and efficient accumulation of the unspliced mRNA in the cytoplasm, where its translation was blocked by SXL, but not by the intron per se. Both splicing and translation inhibition by SXL were recapitulated in vitro and found to be dependent upon SXL binding to high-affinity sites within the intron, showing that SXL directly regulates these events. Our data reveal a coordinated mechanism for the regulation of msl-2 expression by the same regulatory factor: SXL enforces intron retention in the nucleus and subsequent translation inhibition in the cytoplasm.