Clusters of genes that have evolved by repeated segmental duplication present difficult challenges throughout genomic analysis, from sequence assembly to functional analysis. These clusters are one of the major sources of evolutionary innovation, and they are linked to multiple diseases, including HIV and a variety of cancers. Understanding their evolutionary histories is a key to the application of comparative genomics methods in these regions of the genome. We propose a probabilistic model of gene cluster evolution on a phylogeny, and an MCMC algorithm for reconstruction of duplication histories from genomic sequences in multiple species. Several projects are underway to obtain high quality BAC-based assemblies of duplicated clusters in multiple species, and we anticipate use of our methods in their analysis.