Skeletal atavism in Shetland ponies is a heritable disorder characterized by abnormal growth of the ulna and fibula that extend the carpal and tarsal joints, respectively. This causes abnormal skeletal structure, impaired movements, and affected foals are usually euthanized. In order to identify the causal mutation we subjected six confirmed Swedish cases and a DNA pool consisting of 21 control individuals to whole genome resequencing. We screened for polymorphisms where the cases and the control pool were fixed for opposite alleles and observed this signature for only 25 SNPs, most of which were scattered on genome assembly unassigned scaffolds. Read depth analysis at these loci revealed homozygosity or compound heterozygosity for two partially overlapping large deletions in the pseudoautosomal region (PAR) of chromosome X/Y in cases but not in the control pool. One of these deletions removes the entire coding region of the SHOX gene and both deletions remove parts of the CRLF2 gene located downstream of SHOX. The horse reference assembly of the PAR is highly fragmented, and in order to characterize this region we sequenced bacterial artificial chromosome (BAC) clones by single-molecule real-time (SMRT) sequencing technology. This considerably improved the assembly and enabled size estimations of the two deletions to 160-180 kb and 60-80 kb, respectively. Complete association between the presence of these deletions and disease status was verified in eight other affected horses. The result of the present study is consistent with previous studies in humans showing crucial importance of SHOX for normal skeletal development. Copyright © 2016 Author et al.