XLalphas and ALEX are structurally unrelated mammalian proteins translated from alternative overlapping reading frames of a single transcript. Not only are they encoded by the same locus, but a specific XLalphas/ALEX interaction is essential for G-protein signaling in neuroendocrine cells. A disruption of this interaction leads to abnormal human phenotypes, including mental retardation and growth deficiency. The region of overlap between the two reading frames evolves at a remarkable speed: the divergence between human and mouse ALEX polypeptides makes them virtually unalignable. To trace the evolution of this puzzling locus, we sequenced it in apes, Old World monkeys, and a New World monkey. We show that the overlap between the two reading frames and the physical interaction between the two proteins force the locus to evolve in an unprecedented way. Namely, to maintain two overlapping protein-coding regions the locus is forced to have high GC content, which significantly elevates its intrinsic evolutionary rate. However, the two encoded proteins cannot afford to change too quickly relative to each other as this may impair their interaction and lead to severe physiological consequences. As a result XLalphas and ALEX evolve in an oscillating fashion constantly balancing the rates of amino acid replacements. This is the first example of a rapidly evolving locus encoding interacting proteins via overlapping reading frames, with a possible link to the origin of species-specific neurological differences.