The stem rust resistance gene Sr2 has provided durable broad-spectrum, adult-plant resistance to the fungal pathogen Puccinia graminis Pers. f. sp. tritici throughout wheat-growing regions of the world for more than 50 years. The ability to select for Sr2 in wheat breeding programs was recently improved by the identification of a tightly linked microsatellite marker gwm533. This marker typically amplifies a 120-bp polymerase chain reaction fragment from wheat lines carrying Sr2. In instances where the 120-bp fragment is not associated with the presence of Sr2, DNA sequence analysis has shown that a second allele was amplified, differing in the structure of the microsatellite repeat. To discriminate this allelic homoplasy (alleles identical in size, but not identical by descent), sequence-tagged microsatellites (STM) markers were developed for the Xgwm533 locus. These markers were shown to be diagnostic for the presence of Sr2 in a wide range of germplasm, representative of all major wheat varieties historically grown in Australia. The STMs will be particularly useful for marker-assisted selection in Southern Australian breeding programs, where the use of the marker gwm533 is often precluded by the presence of the non- Sr2-associated 120-bp allele in the pedigree of current breeding germplasm. The STMs also revealed a high incidence of previously undetected allelic homoplasy at the Xgwm533 locus and may have broader utility in genetic research and breeding, as this locus is also reported to be strongly associated with a major gene conferring resistance to Fusarium head blight.