Iduronate 2-sulfatase (IDS, EC 3.1.6.13) is required for the lysosomal degradation of heparan sulfate and dermatan sulfate. Mutations causing IDS deficiency in humans result in the lysosomal storage of these glycosaminoglycans and Hunter syndrome, an X chromosome-linked disease. We have isolated and sequenced a 2.3-kilobase cDNA clone coding for the entire sequence of human IDS. Analysis of the deduced 550-amino acid IDS precursor sequence indicates that IDS has a 25-amino acid amino-terminal signal sequence, followed by 8 amino acids that are removed from the proprotein. An internal proteolytic cleavage occurs to produce the mature IDS present in human liver shown to contain a 42-kDa polypeptide N-terminal to a 14-kDa polypeptide. The IDS sequence has strong sequence homology with other sulfatases (such as sea urchin arylsulfatase, human arylsulfatases A, B, and C, and human glucosamine 6-sulfatase), suggesting that the sulfatases comprise an evolutionarily related family of genes that arose by gene duplication and divergent evolution. The arylsulfatases have a greater homology with each other than with the non-arylsulfatases (IDS and glucosamine 6-sulfatase). The IDS cDNA detected RNA species of 5.7, 5.4, 2.1, and 1.4 kilobases in human placental RNA and revealed structural alterations and gross deletions of the IDS gene in many of the clinically severe Hunter syndrome patients studied.