The genome of the Australian marsupial Macropus robustus contains a highly conserved processed hypoxanthine phosphoribosyltransferase homologue, HPRT-2. Using the techniques of reverse transcriptase-polymerase chain reaction (RT-PCR) and protein isoelectric focusing (IEF) we have shown this processed gene to be fully functional, but liver specific. In contrast, the unprocessed X-linked parent gene HPRT-1 was expressed in all somatic tissues. Expression of the HPRT-2 gene effectively doubles the total HPRT enzyme activity in liver compared to other tissues. Analysis of the 5'-flanking sequence of HPRT-2 revealed regions with homology to the liver-specific regulatory motifs C/EBP, NF-IL6, LF-A1 and LF-B1, although the functional significance of these regions remains unknown. Consistent with X chromosome inactivation in female mammals, transcript levels of the unprocessed X-linked gene HPRT-1 were similar in males and females in all tissues examined. No HPRT-2 activity was detected in testes, indicating that this gene does not compensate for sex chromosome inactivation during spermatogenesis. Moreover, the demonstration of very high HPRT-1 enzyme levels in testes indicated that such a compensatory mechanism may not be required. Phylogenetic analyses attribute considerable antiquity to the processed gene and PCR with conserved primers spanning exons 4-8 of genomic DNA from several different kangaroo species inferring the existence of a conserved processed HPRT-2 homologue in these marsupial species. However, no such conserved PCR product was obtained with DNA from eutherian species, suggesting that integration of HPRT-2 occurred after the separation of the metatherian and eutherian lineages.