A gene, designated GS1, was identified by its association with a CpG island approximately 100 kb telomeric to the steroid sulfatase (STS) locus on the distal short arm of the human X chromosome. Both cDNA and genomic clones of the GS1 gene have been isolated and characterized. The cDNA clone detects a 2.3 kb transcript in human placenta and fibroblasts, and may encode a protein of 214 amino acid residues. Although sequences homologous to GS1 cDNA are present on chromosomes 1, 20, X, and Y, the functional GS1 gene is on the X chromosome. The GS1 gene appears to be non-essential, as there are no obvious clinical differences between STS deficient patients with point mutations in the STS gene, and patients with a deletion of the STS and GS1 genes. The GS1 gene is expressed from mouse-human cell hybrids containing active or inactive human X chromosomes, indicating that it escapes X inactivation. Characterization of GS1 genomic clones revealed that the gene consists of 4 exons spanning over 105 kb, with its transcriptional direction opposite to that of the STS gene. The isolation and characterization of a new gene which escapes X inactivation from distal Xp is of interest as it adds to our understanding of the structural organization of the human X chromosome and may help in providing clues regarding the mechanism of X-inactivation.