The rapid and reliable identification of clinically significant Mycobacterium species is a challenge for diagnostic laboratories. This study evaluates a unique sequence-dependent identification algorithm called MycoAlign for the differential identification of Mycobacterium species. The MycoAlign system uses pan-Mycobacterium-specific primer amplification in combination with a customized database and algorithm. The results of testing were compared with conventional phenotypic assays and GenBank sequence comparisons using the 16S rRNA target. Discrepant results were retested and evaluated using a third independent database. The custom database was generated using the hypervariable sequences of the internal transcribed spacer 1 (ITS-1) region of the rRNA gene complex from characterized Mycobacterium species. An automated sequence-validation process was used to control quality and specificity of evaluated sequence. A total of 181 Mycobacterium strains (22 reference strains and 159 phenotypically identified clinical isolates) and seven nonmycobacterial clinical isolates were evaluated in a comparative study to validate the accuracy of the MycoAlign algorithm. MycoAlign correctly identified all referenced strains and matched species in 94% of the phenotypically identified Mycobacterium clinical isolates. The ITS-1 sequence target showed a higher degree of specificity in terms of Mycobacterium identification than the 16S rRNA sequence by use of GenBank BLAST. This study showed the MycoAlign algorithm to be a reliable and rapid approach for the identification of Mycobacterium species and confirmed the superiority of the ITS-1 region sequence over the 16S rRNA gene sequence as a target for sequence-based species identification.