Sex determination is typically classified as either genotypic or environmental. However, this dichotomy obscures the developmental origin and evolutionary modification of determinants of sex, and therefore hinders an understanding of the processes that generates diversity in sex-determining systems. Recent research on reptiles and fish emphasizes that sex determination is a multifactorial regulatory process that is best understood as a threshold dichotomy rather than as the result of genetically inherited triggers of development. Here we critically assess the relationship between the developmental origin of sex-determining factors and evolutionary transitions in sex-determining systems. Our perspective emphasizes the importance of both genetic and nongenetic causes in evolution of sex determination and may help to generate predictions with respect to the evolutionary patterns of sex-determining systems and the underlying diversity of developmental and genetic regulatory networks.