While developmentally regulated genes are generally conserved, transformer (tra), a key locus involved in the regulation of sexual differentiation, is highly diverged between species of Drosophila. With an aim to understand its divergence between sibling species, we investigated tra sequence variation among members of the Drosophila melanogaster species complex, D. melanogaster, D. simulans, D. mauritiana, and D. sechellia. In this species group, tra divergence is rapid yet clocklike and exhibits large differences in protein size. D. melanogaster contains a 13-amino acid tandem duplication, whereas D. sechellia possesses a 72-amino acid tandem duplication representing a 30% increase in total amino acid residues. We also found evidence of a nonrandom distribution of replacement substitutions and heterogeneity in substitution rates using clustering statistics and a codon substitution model. We show that tra's rapid divergence in this species complex is the result of generally lower selective constraints around regions that encode arginine-serine (RS) domains and a significantly higher rate of substitutions around the insertion site of D. sechellia's large duplication. The proximity of rapidly diverged regions to sites of nucleotide insertion suggests that higher local rates of mutation may provide a causal mechanism for TRA's rapid divergence in this subgroup. A comparison of tra orthologs across the genus Drosophila suggest that TRA maintains an assortment of RS domains for proper sex determining function while much of the protein evolves relatively unconstrained.