Sex determination and sexual differentiation pathways are highly conserved between marsupials and eutherians. There are 2 different pathways of prostaglandin D₂ (PGD₂) synthesis: prostaglandin D synthase (PTGDS) and haematopoietic prostaglandin D synthase (HPGDS). PGD₂ regulates the subcellular localization of SOX9 during gonadal sexual differentiation. To investigate the function of PGD₂ in the tammar gonad, we cultured undifferentiated male gonads in the presence of the HPGDS inhibitor HQL-79 and female gonads with exogenous PGD₂ to mimic activation of the PTGDS-PGD₂ pathway. Tammar PTGDS and HPGDS have only 50% similarity with mouse and human orthologues, but functional domains are conserved. The expression of <i>SOX9</i> was unchanged by the treatments in cultured gonads, but its subcellular localization was markedly affected. SOX9 remained cytoplasmic in the Sertoli cells of testes treated with HQL-79. Treated testes developed a thickened ovary-like surface epithelium. In contrast, SOX9 became nuclear in the granulosa cells of developing ovaries treated with PGD₂ and the surface epithelium was thin, as in testes. These results demonstrate that PGD₂ regulates the subcellular localization of SOX9 and subsequent gonadal development in the developing marsupial gonads, as it does in mice, and that it must have been an ancestral mechanism.