A general theory of mammalian sexual differentiation is proposed. All biological sex differences are the result of the inequality in effects of the sex chromosomes, which are the only factors that differ in XX vs. XY zygotes. This inequality leads to male-specific effects of the Y chromosome, including expression of the testis-determining gene Sry that causes differentiation of testes. Thus, Sry sets up lifelong sex differences in effects of gonadal hormones. Y genes also act outside of the gonads to cause male-specific effects. Differences in the number of X chromosomes between XX and XY cells causes sex differences in expression (1) of Xist, (2) of X genes that escape inactivation, and (2) of parentally imprinted X genes. Sex differences in phenotype are ultimately the result of multiple, independent sex-biasing factors, hormonal and sex chromosomal. These factors act in parallel and in combination to induce sex differences. They can also can offset each other to reduce sex differences. Other mechanisms, operating at the level of populations, cause groups of males to differ on average from groups of females. The theory has advantages for directing attention to inherent sex-biasing factors that operate in many tissues to cause sex differences, to cause sex-biased protection from disease, and to frame questions for further study.