The mechanism through which gene expression originating from the single male or the two female X chromosomes in Drosophila is adjusted to autosomal gene expression has remained controversial. According to the prevalent model, transcription of the male X is increased twofold by the male-specific-lethal (MSL) complex. However, a significant body of data supports an alternative model, whereby compensation involves a global repression of autosomal gene expression in males by sequestration and neutralization of an activator onto the X chromosome. In order to rigorously discriminate between these models we identified direct target genes for the MSL complex and quantified transcription in absolute terms after knockdown of MSL2. The results unequivocally document an approximate twofold activation of target genes by the MSL complex. In Drosophila, male cells contain only a single copy of the X chromosome, whereas female cells harbor two X chromosomes. The different dosage of X-linked genes in males versus females necessitates a compensatory adjustment of gene expression. The mechanism through which dosage compensation is achieved is still a matter of debate. As proposed by the prevailing model, a malespecific regulatory complex of proteins and noncoding RNA, the male-specific-lethal (MSL) complex, functions as an activator that doubles the transcription of X-linked target genes in males (for review see, Gorman and Baker 1994;Lucchesi 1998;Straub et al. 2005a). The strongest argument for this model, which we refer to as the "activation model" was the finding that all components of the complex (MSL1-3, MLE, the histone acetyl transferase MOF (males absent on the first), the noncoding RNAs roX1, and roX2) and the acetylation of Lys 16 of histone H4 (H4K16ac) are specifically enriched on the male X (Kuroda et al. 1991;Palmer et al. 1993;Bashaw and Baker 1995;Gorman et al. 1995;Zhou et al. 1995;Gu et al. 1998;Franke and Baker 1999). In selected cases, the MSL complex has been mapped to the coding regions of active genes (Sass et al. 2003). Furthermore, acetylation of K16 on histone H4 can lead to strong de-repression of transcription (Akhtar and Becker 2000). Thus, it has been proposed that the twofold increase in transcription is directly due to a change of chromatin structure caused by local or domain-wide histone hyperacetylation. However, it has never been demonstrated unequivocally in vivo that binding of the complex to a specific gene is directly related to its hyperactivation.To the contrary, the activation model has been challenged over the years, most prominently by Birchler et al. (for review, see Birchler et al. 2003;Straub et al. 2005a). They argue that due to a phenomenon called the "inverse dosage effect," the X-chromosomal monosomy in males leads to global activation of all chromosomes. According to their model, which we shall term the "inverse model," the MSL complex evolved to counteract the inverse dosage effect on autosomal gene expression. The inverse dosage effect summarizes a multitude of observations i...