Xp11 translocation renal cell carcinoma (tRCC) is a female-predominant kidney cancer driven by translocations between the TFE3 gene on chromosome Xp11.2 and partner genes located on either chrX or on autosomes. The rearrangement processes that underlie TFE3 fusions, and whether they are linked to the female sex bias of this cancer, are largely unexplored. Moreover, whether oncogenic TFE3 fusions arise from both the active and inactive X chromosomes in females remains unknown. Here we address these questions by haplotype-specific analyses of whole-genome sequences of 29 tRCC samples from 15 patients and by re-analysis of 145 published tRCC whole-exome sequences. We show that TFE3 fusions universally arise as reciprocal translocations with minimal DNA loss or insertion at paired break ends. Strikingly, we observe a near exact 2:1 female:male ratio in TFE3 fusions arising via X:autosomal translocation (but not via X inversion), which accounts for the female predominance of tRCC. This 2:1 ratio is at least partially attributable to oncogenic fusions involving the inactive X chromosome and is accompanied by partial re-activation of silenced chrX genes on the rearranged chromosome. Our results highlight how somatic alterations involving the X chromosome place unique constraints on tumor initiation and exemplify how genetic rearrangements of the sex chromosomes can underlie cancer sex differences.