A novel X-linked gene, DXS8237E, was isolated from human fetal brain cDNA, and its 3' end was mapped to within 20 kb upstream of UBE1 in Xp11.23. A 1.3-kb cDNA for DXS8237E detects homologous sequences in other mammals and a 3-kb mRNA that is widely expressed in human cell lines and mouse tissues. Sequence analysis indicated that the 1.3-kb cDNA contains the 3' end of the DXS8237E gene, but the sequence shows no significant homology to known genes. DXS8237E was shown to be subject to X inactivation in five somatic cell hybrids that contain an inactive human X chromosome but no active homologue. Since UBE1 escapes X inactivation, DXS8237E and UBE1 are the closest mapped genes with discordant X inactivation profiles. Sequences in the vicinity of these two genes may be important determinants of X inactivation status.