BACKGROUND: X-linked alpha thalassemia, mental retardation syndrome in humans is a rare recessive disorder caused by mutations in the ATRX gene. The disease is characterised by severe mental retardation, mild alpha-thalassemia, microcephaly, short stature, facial, skeletal, genital and gonadal abnormalities. RESULTS: We examined the expression of ATRX and ATRY during early development and gonadogenesis in two distantly related mammals: the tammar wallaby (a marsupial) and the mouse (a eutherian). This is the first examination of ATRX and ATRY in the developing mammalian gonad and fetus. ATRX and ATRY were strongly expressed in the developing male and female gonad respectively, of both species. In testes, ATRY expression was detected in the Sertoli cells, germ cells and some interstitial cells. In the developing ovaries, ATRX was initially restricted to the germ cells, but was present in the granulosa cells of mature ovaries from the primary follicle stage onwards and in the corpus luteum. ATRX mRNA expression was also examined outside the gonad in both mouse and tammar wallaby whole embryos. ATRX was detected in the developing limbs, craniofacial elements, neural tissues, tail and phallus. These sites correspond with developmental deficiencies displayed by ATR-X patients. CONCLUSIONS: There is a complex expression pattern throughout development in both mammals, consistent with many of the observed ATR-X syndrome phenotypes in humans. The distribution of ATRX mRNA and protein in the gonads was highly conserved between the tammar and the mouse. The expression profile within the germ cells and somatic cells strikingly overlaps with that of DMRT1, suggesting a possible link between these two genes in gonadal development. Taken together, these data suggest that ATRX has a critical and conserved role in normal development of the testis and ovary in both the somatic and germ cells, and that its broad roles in early mammalian development and gonadal function have remained unchanged for over 148 million years of mammalian evolution.