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Abstract Early lineage diversification is central to understand what mutational events drive species divergence. Particularly, gene misregulation in interspecific hybrids can inform about what genes and pathways underlie hybrid dysfunction. InDrosophilahybrids, how regulatory evolution impacts different reproductive tissues remains understudied. Here, we generate a new genome assembly and annotation inDrosophila willistoniand analyse the patterns of transcriptome divergence between two allopatrically evolvedD. willistonisubspecies, their male sterile and female fertile hybrid progeny across testis, male accessory gland, and ovary. Patterns of transcriptome divergence and modes of regulatory evolution were tissue‐specific. Despite no indication for cell‐type differences in hybrid testis, this tissue exhibited the largest magnitude of expression differentiation between subspecies and between parentals and hybrids. No evidence for anomalous dosage compensation in hybrid male tissues was detected nor was a differential role for the neo‐ and the ancestral arms of theD. willistoni Xchromosome. Compared to the autosomes, theXchromosome appeared enriched for transgressively expressed genes in testis despite being the least differentiated in expression between subspecies. Evidence for fine genome clustering of transgressively expressed genes suggests a role of chromatin structure on hybrid gene misregulation. Lastly, transgressively expressed genes in the testis of the sterile male progeny were enriched for GO terms not typically associated with sperm function, instead hinting at anomalous development of the reproductive tissue. Our thorough tissue‐level portrait of transcriptome differentiation between recently divergedD. willistonisubspecies and their hybrids provides a more nuanced view of early regulatory changes during speciation.