Recombination is believed to prevent genetic deterioration in sexual populations because it allows conservation of functional genotypes by removing deleterious mutations. Moreover, evidence that non-recombining segments of a genome deteriorate is provided by genetic experiments in Drosophila and yeast. Y chromosomes generally do not recombine along most of their length, and thus Y chromosome genes, despite having been selectively maintained for their function, could be lost from the genome. Here we present definitive evidence that functional Y genes can be lost from the mammalian genome. TSPY genes must have been selectively maintained on the mammalian Y chromosome since before the radiation of eutheria, 80 million years ago, as they are found conserved on the Y chromosome in two mammalian orders: primate and artiodactyl. We have now identified TSPY on the rodent Y chromosome, in mouse and rat. The gene structure and expression of rat TSPY suggest that it is a functional, testis-specific gene, but the closely related mouse gene, Tspy, has clearly become non-functional, producing only low levels of aberrantly spliced transcripts. Thus TSPY lost its function in the mouse lineage after its divergence from the rat lineage. So, in the case of Tspy at least, the absence of recombination does appear to have led to the loss of a functional gene.