The X-linked dominant and male-lethal disorder incontinentia pigmenti (IP) is caused by mutations in a gene called NEMO (IKK-γ). We recently reported the structure of NEMO and demonstrated that most IP patients carry an identical deletion that arises due to misalignment between repeats. Affected male abortuses with the IP deletion had provided clues that a second, incomplete copy of NEMO was present in the genome. We have now identified clones containing this truncated copy (ΔNEMO) and incorporated them into a previously constructed physical contig in distal Xq28. ΔNEMO maps 22 kb distal to NEMO and only contains exons 3–10, confirming our proposed model. A sequence of 26 kb 3′ of the NEMO coding sequence is also present in the same position relative to the ΔNEMO locus, bringing the total length of the duplication to 35.5 kb. The LAGE2 gene is also located within this duplicated region, and a similar but unique LAGE1 gene is located just distal to the duplicated loci. Mapping and sequence information indicated that the duplicated regions are in opposite orientation. Analysis of the great apes suggested that the NEMO/LAGE2 duplication occurred after divergence of the lineage leading to present day humans, chimpanzees and gorillas, ∼10–15 million years ago. Intriguingly, despite this substantial evolutionary history, only 22 single nucleotide differences exist between the two copies over the entire 35.5 kb, making the duplications >99% identical. This high sequence identity and the inverted orientations of the two copies, along with duplications of smaller internal sections within each copy, predispose this region to various genomic alterations. We detected four rearrangements that involved NEMO, ΔNEMO or LAGE1 and LAGE2. The high sequence similarity between the two NEMO/LAGE2 copies may be due to frequent gene conversion, as we have detected evidence of sequence transfer between them. Together, these data describe an unusual and complex genomic region that is susceptible to various types of pathogenic and polymorphic rearrangements, including the recurrent lethal deletion associated with IP.