Heteromorphic W and Y sex chromosomes often experience gene loss and heterochromatinization, which is frequently viewed as their “degeneration”. However, the evolutionary trajectories of the heterochromosomes are in fact more complex since they may not only lose but also acquire new sequences. Previously, we found that the heterochromatic W chromosome of a lizard Eremias velox (Lacertidae) is decondensed and thus transcriptionally active during the lampbrush stage. To determine possible sources of this transcription, we sequenced DNA from a microdissected W chromosome sample and a total female DNA sample and analyzed the results of reference-based and de novo assembly. We found a new repetitive sequence, consisting of fragments of an autosomal protein-coding gene ATF7IP2, several SINE elements, and sequences of unknown origin. This repetitive element is distributed across the whole length of the W chromosome, except the centromeric region. Since it retained only 3 out of 10 original ATF7IP2 exons, it remains unclear whether it is able to produce a protein product. Subsequent studies are required to test the presence of this element in other species of Lacertidae and possible functionality. Our results provide further evidence for the view of W and Y chromosomes as not just “degraded” copies of Z and X chromosomes but independent genomic segments in which novel genetic elements may arise.