The ribosomal RNAs produced by the multigene families on the X and Y chromosomes of Drosophila melanogaster are very similar despite the apparent evolutionary isolation of the X and Y chromosomal rDNA. X–Y exchange through the rDNA is one mechanism that may promote co-evolution of the two gene clusters by transferring Y rDNA copies to the X chromosome. This hypothesis predicts that the proximal rDNA of X chromosomes will be Y-like. Consequently, rDNA variants found only on the X chromosome (such as those interrupted by type 1 insertions) should be significantly clustered in the distal X nucleolus organizer. Proximal and distal portions of the X chromosome nucleolus organizer were separated by recombination between the inverted chromosomes In(1)scv2 (breakpoint in the centre of the rDNA) and In(1)sc4Lsc8R (no rDNA). Molecular analyses of the resulting stocks demonstrated that rRNA genes containing type 1 insertions were predominantly located on the chromosome carrying the distal portion of the X rDNA, thus confirming a prediction of the X–Y exchange hypothesis for the co-evolution of X and Y chromosomal rDNA. Distal clustering is not predicted by the alternative hypotheses of selection or gene conversion.