Previous studies of epithelial cell growth and differentiation in the prostate gland have identified the homeodomain protein Nkx3.1 as a central regulator of prostate development and carcinogenesis. To understand the molecular mechanisms of Nkx3.1 function, we have used yeast two-hybrid analysis to identify Nkx3.1 interacting proteins, and have isolated Fem1b, a mammalian homolog of the C. elegans sex-determining gene Fem-1. In mice, the Fem1b and Nkx3.1 genes encode proteins that interact in glutathione-S-transferase (GST) pull-down and co-immunoprecipitation assays, and are co-expressed in the prostate and testis of neonatal mice. Null mutants for Fem1b generated by gene targeting display defects in prostate ductal morphogenesis and secretory protein expression, similar to phenotypes found in Nkx3.1 mutants. We propose that Fem1b may have a conserved role in the generation of sexual dimorphism through its interaction with Nkx3.1 in the developing prostate gland. Developmental Dynamics 237:2963–2972, 2008. © 2008 Wiley-Liss, Inc.