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Gametogenesis in males and females differs in many ways. An important difference in Drosophila is that recombination between homologous chromosomes occurs only in female meiosis. Here, we report that this process relies on the correct functioning of Sex-lethal (Sxl) which is primarily known as the master gene in somatic sex determination. Certain alleles of this gene (Sxlfs) disrupt the germline, but not the somatic function of Sxl and cause an arrest of germ cell development during cystocyte proliferation. Using dominant suppressor mutations that relieve this early block in Sxlfs mutant females, we discovered additional requirements of Sxl for normal meiotic differentiation of the oocyte. Females mutant for Sxlfs and carrying a suppressor become fertile, but pairing of homologous chromosomes and formation of chiasmata is severely perturbed, resulting in an almost complete lack of recombinants and a high incidence of non-disjunction events. Similar results were obtained when germline expression of wild-type Sxl was compromised by mutations in virilizer (vir), a positive regulator of Sxl. Ectopic expression of a Sxl transgene in premeiotic stages of male germline development, on the other hand, is not sufficient to allow recombination to take place, which suggests that Sxl does not have a discriminatory role in this female-specific process. We propose that Sxl performs at least two tasks in oogenesis: an ‘early’ function in formation of the egg chamber, and a ‘late’ function in progression of the meiotic cell cycle, suggesting that both events are coordinated by a common mechanism.