Abstract: The yeast Saccharomyces cerevisiae contains two clusters of eight genes each on chromosome 10 and 5, denoted, respectively, the COR and ARC regions. The genes in the COR region include TRS1 (a tRNA(Ser) gene), ANB1, CYC1, UTR1, UTR3, OSM1, tRNA(Gly) and RAD7 whereas the genes in the ARC region include TRS2 (a tRNA(Ser) gene), TIF51A, UTR5, ANP1, RAD23, UTR4, CYC7 and UTR2. We have performed a physical analysis of the ARC region, including determining DNA sequence of the 7529 nucleotides; the open reading frames; the size and orientation of the transcripts; and the phenotypes resulting from deletions or gene disruptions. The ARC region was systematically compared to the COR region which was previously described. The gene pairs CYC1-CYC7 and ANB1-TIF51A were previously shown to be, respectively, approximately 80% and 90% identical. tRNA(Ser) genes, TRS1 and TRS2, are located in both clusters 953 nt and 344 nt downstream of ANB1 and TIF51A, respectively. Some of the other gene pairs of these clusters are related in function and share only short segments of similarity distributed within the regions. The best alignment based on amino acid and nucleotide sequences indicates that the ARC and COR regions are ancestrally related by a duplication, a transposition, and a single rearrangement, followed by extensive divergence. These comparisons allowed an evaluation of distantly related sequences not obviously revealed by standard computer analysis. Surprisingly, the alignment suggested that a translated region of the ARC ANP1 gene and the COR tRNA(Gly) gene are ancestrally related. Also translated regions of the COR gene RAD7 share similarities with both of the two adjacent ARC genes, ANP1 and RAD23. Five examples of simple repeated amino acid and DNA sequences occurred in the ARC region but none in the COR region. We suggest that these repeated sequences played a role in the divergence of ARC genes.