When the Y chromosome of some Mus musculus domesticus subspecies is placed onto a C57BL/6J mouse background, the XY (B6.Y(TIR)) progeny develop only ovaries or ovotestes during fetal life. The XY sex-reversed female is infertile mainly because of death of embryos during preimplantation development. In the present study, we constructed female mouse chimera composed of B6.Y(TIR) and XX BALB/c cells to determine whether developmental incompetence of XY oocytes can be attributed to defects in the oocytes themselves or in the surrounding XY somatic cells. Distribution of XY cells in chimeric ovaries was examined by in situ hybridization. Of nine XX XY chimeric females born, eight were composed of B6.Y(TIR) and XX BALB/c cells with a wide range of XY contribution (16-95%), whereas one had 12% XY components of the BALB/c strain. All these females produced progeny exclusively derived from XX oocytes. By comparison, most XX XX chimeric females produced progeny derived from oocytes of either strain. Two XY XY males also produced progeny of both strains. In conclusion, the XY chromosomal composition in the oocyte appears to be responsible for programming its incompetence for postfertilization development. On the other hand, the presence of XY somatic cells in the chimeric ovary allows development of fertile XX oocytes.