We have isolated a novel gene, ASMTL (acetylserotonin methytransferase-like ), in the pseudoautosomal region (PAR1) on the human sex chromosomes. ASMTL represents a unique fusion product of two different full-length genes of different evolutionary origin and function. One part is homologous to the bacterial maf/orfE genes. The other part shows significant homology to the entire open reading frame of the previously described pseudoautosomal gene ASMT, encoding the enzyme catalysing the last step in the synthesis of melatonin. We have also detected the identity of one exon (1A) of ASMT to exon 3 in yet another pseudoautosomal gene, XE7. The data presented suggest that exon duplication and exon shuffling as well as gene fusion may represent common characteristics in the pseudoautosomal region.