Sex reversal occurs naturally in the wood lemming (Myopus schisticolor) due to the presence in populations of this species of a variant (mutated) X chromosome, designated X*. Thus, X*Y animals develop into females, whereas XY animals develop into normal males. Chromosome mapping by in situ hybridization of DNA sequences homologous to the human ZFY gene localized the wood lemming Zfx sequences to region p12----p11 on both the wild-type X and the mutated X* chromosomes, at or proximal to a presumed breakpoint (Xp12) involved in the generation of the X* chromosome from the normal X, and Zfy sequences along the entire short arm of the Y chromosome. Differences between Zfx and Zfx* were readily detected by Southern blot analysis. However, both the Zfx and Zfx* genes expressed similarly sized transcripts in all adult somatic tissues investigated. Although the precise molecular difference between the Zfx and Zfx* genes is still unknown, their chromosomal location suggests that either Zfx or some other closely linked gene(s) on the X chromosome may be a major X-linked sex-determining gene, Tdx, which in the X* chromosome fails to interact properly with the Y-linked testis-determining gene, Tdy, thus causing X*Y embryos to develop into females. At least 15 copies of wood lemming Zfy sequences are distributed along the short arm of the Y chromosome. Northern hybridization analyses of adult tissues and somatic cell lines indicated that these Zfy repeats were transcriptionally inactive. Normally, 3-kb Zfy (ZFY) transcripts are readily detected in mouse and human testes, especially in the germ cells. It has therefore been postulated that expression of the Zfy (ZFY) gene may be important for spermatogenesis. Whether the lack of sufficient Zfy transcripts in the testis of the adult wood lemming has any impact on spermatogenesis in this species is still to be elucidated by further studies.