In metazoans, Piwi-related Argonaute proteins engage piRNAs (Piwi-interacting small RNAs) to defend the genome against invasive nucleic acids, such as transposable elements. Yet many organisms-including worms and humans-express thousands of piRNAs that do not target transposons, suggesting that piRNA function extends beyond genome defense. Here, we show that the X chromosome-derived piRNA 21ux-1 downregulates XOL-1 (XO Lethal), a master regulator of X chromosome dosage compensation and sex determination in Caenorhabditis elegans. Mutations in 21ux-1 and several Piwi-pathway components sensitize hermaphrodites to dosage compensation and sex determination defects. We show that the piRNA pathway also targets xol-1 in C. briggsae, a nematode species related to C. elegans. Our findings reveal physiologically important piRNA-mRNA interactions, raising the possibility that piRNAs function broadly to ensure robust gene expression and germline development.