The mammalian X and Y chromosomes are thought to have evolved from a common, nearly homologous chromosome pair. Although there is little sequence similarity between the mouse or the human X and Y, there are several regions in which moderate to extensive sequence homologies have been found, including, but not limited to, the so-called pseudoautosomal segment, in which X-Y pairing and recombination take place. The steroid sulfatase gene is in the psuedoautosomal region of the mouse, but not in man. We have cloned and characterized the human STS X-encoded locus and a pseudogene that is present on the long arm of the Y chromosome. Our data in humans and other primates suggest that there has been a pericentric inversion of the Y chromosome during primate evolution that has disrupted the former pseudoautosomal arrangement of these genes. These results provide additional insight into the evolution of the sex chromosomes and into the nature of this interesting portion of the human genome.