Expression of Sox3 has been detected in the testes of humans and of developing and adult mice at the same time as Sox9 and Sry. The co-expression of these three related Sox genes in the mouse indifferent gonadal ridge led to the hypothesis that these three genes, encoding transcription factors with similar DNA target binding sites, may interact with each other in initiating testis differentiation. The location of SOX3 on the marsupial Dunnart X chromosome also makes it a candidate for the marsupial X-linked gene responsible for the SRY- and hormone-independent initiation of scrotum or mammary gland development. Here we show that although marsupial SOX3 is highly conserved at the genetic level and appears to have a conserved role in CNS development, its expression during sexual differentiation differs from that of mice and humans. SOX3 expression is absent from the developing marsupial genital ridge and from the scrotal and mammary primordia during the critical time of differentiation and throughout the time that SRY is expressed. The absence of expression in the developing gonad strongly suggests that SOX3 does not have a conserved role in mammalian sexual determination or differentiation.