nanos (nos) specifies posterior development in the Drosophila embryo by repressing the translation of maternal hb mRNA. In addition to this somatic function, nos is required in the germline progenitors, the pole cells, to establish transcriptional quiescence. We have previously reported that nos is required to keep the Sex-lethal establishment promoter, Sxl-Pe, off in the germline of both sexes. We show here that nos also functions to repress Sxl-Pe activity in the surrounding soma. Sxl-Pe is inappropriately activated in the soma of male embryos from nos mothers, while Sxl-Pe can be repressed in female embryos by ectopic Nos protein. nos appears to play a global role in repressing transcription in the soma as the effects of nos on promoter activity are correlated with changes in the phosphorylation status of the carboxy terminal domain (CTD) repeats of the large RNA polymerase II subunit. Finally, we present evidence indicating that the suppression of transcription in the soma by Nos protein is important for normal embryonic development.