Among a number of genes that escape X-chromosome inactivation in humans, three have been evaluated in mice and unexpectedly all three are subject to X-inactivation. We report here the cloning and expression studies of a novel mouse gene, Xe169, and show that it escapes X-inactivation like its human homologue. Xe169 was assigned to band F2/F3 on the mouse X chromosome by fluorescent in situ hybridization and Southern analysis indicates that the gene is located outside the pseudoautosomal region. Homologous, but divergent, sequences exist on the Y chromosome. In vitro and in vivo studies show that Xe169 is expressed from both the active and the inactive X chromosomes. Xe169 is the first cloned non-pseudoautosomal gene that escapes X-inactivation in mice.