Fusion events between sex chromosomes and autosomes are an important part of karyotype evolution in animals. In some cases, ancestral sex chromosomes revert back into autosomes, for example the dot chromosome of Drosophila is an ancient X chromosome. However, there are few documented cases of Y chromosome reversals to autosomes. D. pseudooscura is well-suited to study Y chromosome reversal: a fusion between the ancestral Y chromosome and an autosome (Y-to-dot) occurred ~15 MYA making the ancestral Y chromosome now autosomal. To gain insight into the evolutionary forces shaping this Y chromosome reversal, we used single molecule real time sequencing reads generated with Pacbio to assemble the dot chromosome of D. pseudoobscura, including the Y-to-dot region. This contig has all identified ancestral Y-linked genes, ~100 conserved dot-linked genes and telomere sequences. Surprisingly, the ancestral Y and the conserved part of the dot chromosome are only ~70kb apart, suggesting centromere is not located in the fusion region. Notably, the Y-to-dot does not contain many tandem repeats or satellite DNAs in both its intergenic and intron regions and is only 340 kb—one tenth of the size of the Y chromosome in D. melanogaster. Our analysis of transcriptomic data revealed that Y-to-dot genes expression remain testis-specific, even after becoming autosomal for ~15 MY. In addition, both Y-to-dot and conserved dot regions showed lower nucleotide diversity, consistent with the low recombination rates on dot chromosome in D. pseuodoobscura and D. miranda. Because Y chromosomes lack recombination and have a reduced efficacy of natural selection, they tend to accumulate repetitive elements and other deleterious mutations through Muller’s ratchet. As a consequence, Y chromosomes tend to have large introns including some that are megabases long. The Y-to-dot region does have longer introns than other parts of the dot chromosome and other autosomes. However, except for the absence of Y-linked mega-introns, there are no significant reductions in intron sizes on Y-to-dot of D. pseudoobscura compared to the Y chromosome of D. melanogaster. While previous studies suggest that recurrent selective sweeps favoring shorter introns shaped the Y-to-dot region, an alternative hypothesis is that the ancestor of the obscura group had a much smaller Y chromosome than D. melanogaster. Consistent with this hypothesis, our cytological survey of Y chromosomes in obscura group suggests that most species in this group have small Y chromosomes. Therefore, the smaller size of the Y-to-dot region may be at least in part due to a small Y chromosome in the ancestor of the obscura group.