The cytochrome P450 3A7 (CYP3A7) is the most abundant CYP in human liver during fetal development and first months of postnatal age, playing an important role in the metabolism of endogenous hormones, drugs, differentiation factors, and potentially toxic and teratogenic substrates. Here we describe and characterize a novel enzyme, CYP3A7.1L, encompassing the CYP3A7.1 protein with the last four carboxyl-terminal amino acids replaced by a unique sequence of 36 amino acids, generated by splicing of CYP3A7 with CYP3AP1 RNA. The corresponding CYP3A7-3AP1 mRNA had a significant expression in liver, kidney, and gastrointestinal tract, and its presence was found to be tissue-specific and dependent on the developmental stage. Heterologous expression in yeast revealed that CYP3A7.1L was a functional enzyme with a specific activity similar to that of CYP3A7.1 and, in some conditions, a different hydroxylation specificity than CYP3A7.1 using dehydroepiandrosterone as a substrate. CYP3A7.1L was found to be polymorphic due to a mutation at position -6 of the first splicing site of CYP3AP1 (CYP3A7_39256T-->A), which abrogates the pseudogene splicing. This polymorphism had pronounced interethnic differences and was in linkage disequilibrium with other functional polymorphisms described in the CYP3A locus: CYP3A7*2 and CYP3A5*1. Therefore, the resulting CYP3A haplotypes express different sets of enzymes within the population. In conclusion, a novel mechanism, consisting of the splicing of the pseudogene CYP3AP1 to CYP3A7, causes the formation of the novel CYP3A7.1L having a different tissue distribution and functional properties than the parent CYP3A7 enzyme, with possible developmental, physiological, and toxicological consequences.