Somatic cell nuclear transfer (SCNT) provides an excellent model for studying epigenomic reprogramming during mammalian development. We mapped the whole genome and whole methylome for potential anomalies of mutations or epimutations in SCNT-generated dogs with XY chromosomal sex but complete gonadal dysgenesis, which is classified as 78, XY disorder of sex development (DSD). Whole genome sequencing revealed no potential genomic variations that could explain the pathogenesis of DSD. However, extensive but stochastic anomalies of genome-wide DNA methylation were discovered in these SCNT DSD dogs. Persistent abnormal hypermethylation of the SRY gene was observed together with its down-regulated mRNA and protein expression. Failure of SRY expression due to hypermethylation was further correlated with silencing of a serial of testis determining genes, including SOX9, SF1, SOX8, AMH and DMRT1 in an early embryonic development stage at E34 in the XY(DSD) gonad, and high activation of the female specific genes, including FOXL2, RSPO1, CYP19A1, WNT4, ERα and ERβ, after one postnatal year in the ovotestis. Our results demonstrate that incomplete demethylation on the SRY gene is the driving cause of XY(DSD) in these XY DSD dogs, indicating a central role of epigenetic regulation in sex determination.