During early embryogenesis in amniotic vertebrates, the gonads differentiate into either ovaries or testes. The first cell lineage to differentiate gives rise to the supporting cells: Sertoli cells in males and pre-granulosa cells in females. These key cell types direct the differentiation of the other cell types in the gonad, including steroidogenic cells. The gonadal surface epithelium and the interstitial cell populations are less well studied, and little is known about their sexual differentiation programs. Here, we show the requirement of the homeobox transcription factor gene TGIF1 for ovarian development in the chicken embryo. TGIF1 is expressed in the two principal ovarian somatic cell populations: the cortex and the pre-granulosa cells of the medulla. TGIF1 expression is associated with an ovarian phenotype in estrogen-mediated sex reversal experiments. Targeted misexpression and gene knockdown indicate that TGIF1 is required, but not sufficient, for proper ovarian cortex formation. In addition, TGIF1 is identified as the first known regulator of juxtacortical medulla development. These findings provide new insights into chicken ovarian differentiation and development, specifically cortical and juxtacortical medulla formation.