Dosage compensation is an epigenetic mechanism that balances gene expression from unequally distributed sex chromosomes between the sexes and in relation to the diploid autosomes. In Drosophila melanogaster, this is achieved by twofold upregulation of transcription from the single male X chromosome.The modification of chromatin structure is a general principle of dosage compensation systems in various organisms. Concomitant with the evolution of sex chromosomes, pre-existing epigenetic regulators are often adapted for this novel task.In D. melanogaster males, the dosage compensation complex (DCC) uses the histone acetyltransferase MOF for global hyperacetylation of X-linked chromatin at histone H4 at lysine 16 (H4K16ac). The H4K16ac modification prevents chromatin compaction and is generally associated with enhanced DNA accessibility and transcription.Recognition of the X chromosome by the DCC involves the dynamic interplay between male sex lethal (MSL) proteins, male-specific RNAs on the X (roXs), and a limited number of X-specific DNA sequence elements. The DCC spreads from these high-affinity binding sites (HASs) to the transcribed regions of active genes, where it recognizes features of active chromatin such as transcription coupled histone marks.The DCC induces substantial alterations in the local and long-range structure of X-linked chromatin. The resulting permissive conditions within the X-chromosomal territory create a uniquely active compartment, leading to activation even of autosomal genes that get translocated in this environment.The exact mechanism of transcriptional activation remains enigmatic to date. Traditionally, transcription elongation is thought to be enhanced by H4K16ac in the transcribed regions of genes, and recent evidence supports this idea. However, some data suggest that transcriptional initiation as well as the release of paused Pol II from gene promoters might also be targeted by the dosage compensation mechanism.