© 2017 Meyers-Wallen et al. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Remarkable progress has been achieved in understanding the mechanisms controlling sex determination, yet the cause for many Disorders of Sex Development (DSD) remains unknown. Of particular interest is a rare XX DSD subtype in which individuals are negative for SRY, the testis determining factor on the Y chromosome, yet develop testes or ovotestes, and both of these phenotypes occur in the same family. This is a naturally occurring disorder in humans (Homo sapiens) and dogs (C. familiaris). Phenotypes in the canine XX DSD model are strikingly similar to those of the human XX DSD subtype. The purposes of this study were to identify 1) a variant associated with XX DSD in the canine model and 2) gene expression alterations in canine embryonic gonads that could be informative to causation. Using a genome wide association study (GWAS) and whole genome sequencing (WGS), we identified a variant on C. familiaris autosome 9 (CFA9) that is associated with XX DSD in the canine model and in affected purebred dogs. This is the first marker identified for inherited canine XX DSD. It lies upstream of SOX9 within the canine ortholog for the human disorder, which resides on 17q24. Inheritance of this variant indicates that XX DSD is a complex trait in which breed genetic background affects penetrance. Furthermore, the homozygous variant genotype is associated with embryonic lethality in at least one breed. Our analysis of gene expression studies (RNA-seq and PRO-seq) in embryonic gonads at risk of XX DSD from the canine model identified significant RSPO1 downregulation in comparison to XX controls, without significant upregulation of SOX9 or other known testis pathway genes. Based on these data, a novel mechanism is proposed in which molecular lesions acting upstream of RSPO1 induce epigenomic gonadal mosaicism.