Abstract The genetic basis of Haldane’s rule, such as hybrid male incompatibility in XX systems, has long remained elusive. Here, we found that crosses of Caenorhabditis nigoni males with C. briggsae females result in insufficient expression of Cbr-xol-1 , an X-linked master switch responsible for sex determination, consequently activating aberrant dosage compensation in males, and ultimately leading to embryonic inviability. Three compensatory divergences result in comparable xol-1 expression levels between the parental species but lethal Cbr-xol-1 underexpression in hybrid male embryos: 1) a less active Cbr-xol-1 promoter than its C. nigoni ortholog; 2) loss of an X-linked xol-1 paralog in C. briggsae ; and 3) pseudogenization of a C. briggsae autosomal repressor of xol-1 . Our results define an evolutionary scenario of sexual incompatibility leading to hybrid male inviability.