Variable (V) domains of immunoglobulins (Ig) and T cell receptors (TCR) are generated from genomic V gene segments (V-genes). At present, such V-genes have been annotated only within the genome of a few species. We have developed a bioinformatics tool that accelerates the task of identifying functional V-genes from genome datasets. Automated recognition is accomplished by recognizing key V-gene signatures, such as recombination signal sequences, size of the exon region, and position of amino acid motifs within the translated exon. This algorithm also classifies extracted V-genes into either TCR or Ig loci. We describe the implementation of the algorithm and validate its accuracy by comparing V-genes identified from the human and mouse genomes with known V-gene annotations documented and available in public repositories. The advantages and utility of the algorithm are illustrated by using it to identify functional V-genes in the rat genome, where V-gene annotation is still incomplete. This allowed us to perform a comparative human-rodent phylogenetic analysis based on V-genes that supports the hypothesis that distinct evolutionary pressures shape the TCRs and Igs V-gene repertoires. Our program, together with a user graphical interface, is available as open-source software, downloadable at http://code.google.com/p/vgenextract/.