Various portions of the region surrounding the site where two ancestral chromosomes fused to form human chromosome 2 are duplicated elsewhere in the human genome, primarily in subtelomeric and pericentromeric locations. At least 24 potentially functional genes and 16 pseudogenes reside in the 614-kb of sequence surrounding the fusion site and paralogous segments on other chromosomes. By comparing the sequences of genomic copies and transcripts, we show that at least 18 of the genes in these paralogous regions are transcriptionally active. Among these genes are new members of the cobalamin synthetase W domain (CBWD) and forkhead domain FOXD4 gene families. Copies of RPL23A and SNRPA1 on chromosome 2 are retrotransposed-processed pseudogenes that were included in segmental duplications; we find 53 RPL23A pseudogenes in the human genome and map the functional copy of SNRPA1 to 15qter. The draft sequence of the human genome also provides new information on the location and intron-exon structure of functional copies of other 2q-fusion genes (PGM5, retina-specific F379, helicase CHLR1, and acrosin). This study illustrates that the duplication and rearrangement of subtelomeric and pericentromeric regions have functional relevance to human biology; these processes can change gene dosage and/or generate genes with new functions.