A stern drive is for propelling a marine vessel in a body of water. The stern drive has a powerhead, a mounting assembly configured to affix the powerhead to the transom, inside the marine vessel, and a drive assembly coupled to the mounting assembly, the drive assembly being trimmable up and down relative to the mounting assembly, the drive assembly comprising a driveshaft and an output shaft which extends transversely to the driveshaft. The drive assembly has a driveshaft housing for the driveshaft and a gearcase housing for the output shaft, wherein the gearcase housing is steerable relative to the driveshaft housing. A universal joint couples the powerhead to the driveshaft so that operation of the powerhead causes rotation of the driveshaft, which in turn causes rotation of the output shaft.