Subterminal regions, juxtaposed to telomeres on human chromosomes, contain a high density of segmental duplications, but relatively little is known about the evolutionary processes that underlie sequence turnover in these regions. We have characterized a segmental duplication adjacent to the Xp/Yp telomere, each copy containing a hypervariable array of the DXYS14 minisatellite. Both DXYS14 repeat arrays mutate at a high rate (0.3 and 0.2% per gamete) but linkage disequilibrium analysis across 27 SNPs and a direct crossover assay show that recombination during meiosis is suppressed. Therefore instability at DXYS14a and b is dominated by intra-allelic processes or possibly conversion limited to the repeat arrays. Furthermore some chromosomes (14%) carry only one copy of the duplicon, including one DXYS14 repeat array that is also highly mutable (1.2% per gamete). To explain these and other observations, we propose there is another low-rate mutation process that causes copy number change in part or all of the duplicon.