Massively parallel sequencing instruments enable rapid and inexpensive DNA sequence data production. Because these instruments are new, their data require characterization with respect to accuracy and utility. To address this, we sequenced a Caernohabditis elegans N2 Bristol strain isolate using the Solexa Sequence Analyzer, and compared the reads to the reference genome to characterize the data and to evaluate coverage and representation. Massively parallel sequencing facilitates strain-to-reference comparison for genome-wide sequence variant discovery. Owing to the short-read-length sequences produced, we developed a revised approach to determine the regions of the genome to which short reads could be uniquely mapped. We then aligned Solexa reads from C. elegans strain CB4858 to the reference, and screened for single-nucleotide polymorphisms (SNPs) and small indels. This study demonstrates the utility of massively parallel short read sequencing for whole genome resequencing and for accurate discovery of genome-wide polymorphisms.