Drosophila Sex-lethal (dSXL)-mediated translational repression of male-specific lethal 2 (msl-2) mRNA is essential for X-chromosome dosage compensation. Binding of dSXL to specific sites in both untranslated regions of msl-2 mRNA is necessary for inhibition of translation initiation. We describe the organization of dSXL as a translational regulator and show that the RNA binding and translational repressor functions are contained within the two RRM domains and a C-terminal heptapeptide extension. The repressor function is dormant unless dSXL binds to msl-2 mRNA with its own RRMs, because dSXL tethering via a heterologous RNA-binding peptide does not elicit translational inhibition. We reveal proteins that crosslink to the msl-2 3' untranslated region (3'UTR) and co-immunoprecipitate with dSXL in a fashion that requires its intact repressor domain and correlates with translational regulation. Translation competition and UV-crosslink experiments show that the 3'UTR msl-2 sequences adjacent to dSXL-binding sites are necessary to recruit titratable co-repressors. Our data support a model where dSXL binding to the 3'UTR of msl-2 mRNA activates the translational repressor domain, thereby enabling it to recruit co-repressors in a specific fashion.