The nucleolus organizers on the X and Y chromosomes of Drosophila melanogaster are the sites of 200-250 tandemly repeated genes for ribosomal RNA. As there is no meiotic crossing over in male Drosophila, the X and Y chromosomal rDNA arrays should be evolutionarily independent, and therefore divergent. The rRNAs produced by X and Y are, however, very similar, if not identical. Molecular, genetic and cytological analyses of a series of X chromosome rDNA deletions (bb alleles) showed that they arose by unequal exchange through the nucleolus organizers of the X and Y chromosomes. Three separate exchange events generated compound X.Y( L) chromosomes carrying mainly Y-specific rDNA. This led to the hypothesis that X-Y exchange is responsible for the coevolution of X and Y chromosomal rDNA. We have tested and confirmed several of the predictions of this hypothesis: First, X. Y(L) chromosomes must be found in wild populations. We have found such a chromosome. Second, the X.Y(L) chromosome must lose the Y(L) arm, and/or be at a selective disadvantage to normal X(+) chromosomes, to retain the normal morphology of the X chromosome. Six of seventeen sublines founded from homozygous X.Y(L)bb stocks have become fixed for chromosomes with spontaneous loss of part or all of the appended Y(L). Third, rDNA variants on the X chromosome are expected to be clustered within the X(+) nucleolus organizer, recently donated (" Y") forms being proximal, and X-specific forms distal. We present evidence for clustering of rRNA genes containing Type 1 insertions. Consequently, X-Y exchange is probably responsible for the coevolution of X and Y rDNA arrays.