In Drosophila, XX embryos are fated to develop as females, and XY embryos as males, because the diplo-X dose of four X-linked signal element genes, XSEs, activates the Sex-lethal establishment promoter, SxlPe, whereas the haplo-X XSE dose leaves SxlPe off. The threshold response of SxlPe to XSE concentrations depends in part on the bHLH repressor, Deadpan, present in equal amounts in XX and XY embryos. We identified canonical and non-canonical DNA-binding sites for Dpn at SxlPe and found that cis-acting mutations in the Dpn-binding sites caused stronger and earlier Sxl expression than did deletion of dpn implicating other bHLH repressors in Sxl regulation. Maternal Hey encodes one such bHLH regulator but the E(spl) locus does not. Elimination of the maternal corepressor Groucho also caused strong ectopic Sxl expression in XY, and premature Sxl activation in XX embryos, but Sxl was still expressed differently in the sexes. Our findings suggest that Groucho and associated maternal and zygotic bHLH repressors define the threshold XSE concentrations needed to activate SxlPe and that they participate directly in sex signal amplification. We present a model in which the XSE signal is amplified by a feedback mechanism that interferes with Gro-mediated repression in XX, but not XY embryos.