The t(X;18)(p11.2;q11.2) translocation found in synovial sarcomas results in the fusion of the SYT gene on chromosome 18 to either of two closely related genes SSX1 and SSX2 on chromosome X. The resulting chimaeric genes express SYT-SSX1 or SYT-SSX2 fusion proteins in which the C-terminal amino acids of SYT are replaced by amino acids from the C-terminus of the SSX proteins. Using green fluorescent protein fusions we demonstrate that the SYT, SSX and the SYT-SSX proteins are nuclear proteins. We demonstrate that whilst the SSX1 protein has a uniform nuclear distribution the SYT protein has a speckled distribution in the cell nucleus, and this distribution is retained with the SYT-SSX2 fusion protein. Since the SYT speckles do not co-localise with PML-containing bodies (PODs) or spliceosomes it is possible that they represent a novel nuclear structure. Transfection of constructs expressing GAL4 fusion proteins demonstrate that the SYT domains present in the SYT-SSX fusion proteins can activate transcription of a luciferase reporter. It is proposed that the t(X;18) translocation results in the generation of an SYT-SSX transcriptional co-activator in which the addition of the C-terminal SSX domain to SYT provides a new interacting domain that redirects the SYT activation domain to different target promoters.