Medaka (Oryzias latipes) is a teleost fish with an XX/XY sex determination system, similar to that of mammals. However, under high temperature conditions, XX medaka is masculinised by elevation of cortisol, the major teleost glucocorticoid. In this study, to identify novel factors in the gonads acting downstream from cortisol during sexual differentiation, we performed RNA sequencing (RNA-seq) analysis using the gonadal regions of larvae reared at normal temperature with and without cortisol, and at high temperature. The RNA-seq and real-time PCR analyses showed that expression of some peroxisome proliferator-activated receptor α (PPARα) signalling-targeted genes was increased by cortisol. PPARα agonist treatment induced masculinisation of XX medaka in some cases, and co-treatment of the agonist with cortisol further induced masculinisation, whereas treatment of pparaa knockout medaka with cortisol or the agonist did not induce masculinisation. This study provides the first evidence that PPARα is involved in environmental sex determination in vertebrates.