Doublesex- and Mab-3-related transcription factor-1 (Dmrt1) is an important transcription factor implicated in early testicular differentiation in vertebrates, but its target genes are largely unknown. In the Nile tilapia, estrogen is the natural inducer of ovarian differentiation. Our recent studies have shown that Forkhead-l2 up-regulated transcription of the Cyp19a1a gene (aromatase) in the gonads in a female-specific manner. However, the upstream factor(s) down-regulating Cyp19a1a expression during testicular differentiation remains unclear. In the present study, we used in vitro (promoter analysis) and in vivo (transgenesis and in situ hybridization) approaches to examine whether Dmrt1 inhibits Cyp19a1a's transcriptional activity. The in vitro analysis using luciferase assays revealed that Dmrt1 repressed basal as well as Ad4BP/SF-1-activated Cyp19a1a transcription in HEK 293 cells. Luciferase assays with various deletions of Dmrt1 also showed that the Doublesex and Mab-3 domain is essential for the repression. In vitro-translated Dmrt1 and the nuclear extract from tilapia testis could directly bind to the palindrome sequence ACATATGT in the Cyp19a1a promoter, as determined by EMSAs. Transgenic overexpression of Dmrt1 in XX fish resulted in decreased aromatase gene expression, reduced serum estradiol-17beta levels, retardation of the ovarian cavity's development, varying degrees of follicular degeneration, and even a partial to complete sex reversal. Our results indicate that aromatase is one of the targets of Dmrt1. Dmrt1 suppresses the female pathway by repressing aromatase gene transcription and estrogen production in the gonads of tilapia and possibly other vertebrates.