Steroid sulfatase (STS) is localized in the endoplasmic reticulum and catalyzes desulfation of 3β-hydroxysteroid sulfates. X-linked ichthyosis (XLI) is an inherited skin disorder caused by deficiency of STS enzyme activity. We previously reported a case in which XLI with a one-base change in the STS gene and variation in amino acid Q560P developed. In this study, we performed molecular analysis to determine the importance of terminal regions of STS and the effect of mutant STS on STS enzyme activity. To examine the effect of terminal truncated STS on the enzyme activity, N- and C-terminal truncated STS expression vectors were transfected into COS-1 cells. The activity of truncated STS lacking the N-terminal regions declined, and the activity of C-terminal-truncated STS declined with extension of the truncated C-terminal region. Although the results of pulse-chase experiments showed that a one-base mutant STS (Q560P) and C-terminal-truncated STS (ΔC2 (1–559)) had no effects on protein synthesis and degradation, the mutant STS and C-terminal-truncated STS have dominant negative effect on STS enzyme activity when the STS mutant or truncated STS protein and a wild-type STS protein coexist in cells. Results of coprecipitation of the truncated STS with an STS–FLAG fusion protein showed that STS formed a dimer conformation in cells. In this study, we have shown that both the N-terminal region and C-terminal region are important for STS enzyme activity. The C-terminal mutant has a dominant negative effect on wild-type STS.