Spondyloepiphyseal dysplasia tarda (SEDL) is a genetically heterogeneous disorder characterized by mild-to-moderate short stature and early-onset osteoarthritis. Both autosomal and X-linked forms have been described. Elsewhere, we have reported the identification of the gene for the X-linked recessive form, which maps to Xp22.2. We now report characterization of an exon-skipping mutation (IVS3+5G→A at the intron 3 splice-donor site) in two unrelated families with SEDL. Using reverse transcriptase (RT)-PCR, we demonstrated that the mutation resulted in elimination of the first 31 codons of the open reading frame. The mutation was not detected in 120 control X chromosomes. Articular cartilage from an adult who had SEDL and carried this mutation contained chondrocytes with abundant Golgi complexes and dilated rough endoplasmic reticulum (ER). RT-PCR experiments using mouse/human cell hybrids revealed that the SEDL gene escapes X inactivation. Homologues of the SEDL gene include a transcribed retropseudogene on chromosome 19, as well as expressed genes in mouse, rat, Drosophila melanogaster Caenorhabditis elegans, and Saccharomyces cerevisiae. The latter homologue, p20, has a putative role in vesicular transport from ER to Golgi complex. These data suggest that SEDL mutations may perturb an intracellular pathway that is important for cartilage homeostasis.