Medaka is an ideal model for sex determination and sex reversal, such as XY phenotypically female patients in humans. Here, we assembled improved TALENs targeting the DMY gene and generated XY DMY- mutants to investigate gonadal dysgenesis in medaka. DMY-TALENs resulted in indel mutations at the targeted loci (46.8%). DMY-nanos3UTR-TALENs induced mutations were passed through the germline to F1 generation with efficiencies of up to 91.7%. XYDMY- mutants developed into females, laid eggs, and stably passed the YDMY-chromosome to next generation. RNA-seq generated 157 million raw reads from WT male (WT-M-TE), WT female (WT-F-OV) and XY DMY- female medaka (TA-F-OV) gonad libraries. Differential expression analysis identified 144 up- and 293 down-regulated genes in TA-F-OV compared with WT-F-OV, 387 up- and 338 down-regulated genes in TA-F-OV compared with WT-M-TE. According to genes annotation and functional prediction, such as Wnt1 and PRCK, it revealed that incomplete ovarian function and reduced fertility of XY DMY- mutant is closely related to the wnt signaling pathway. Our results provided the transcriptional profiles of XYDMY- mutants, revealed the mechanism between sex reversal and DMY in medaka, and suggested that XY DMY- medaka was a novel mutant that is useful for investigating gonadal dysgenesis in phenotypic female patients with the 46, XY karyotype.