The D. melanogaster clock gene period (per) is an internally repetitive gene encoding a tandem array of Thr-Gly codons that are highly polymorphic in length in European natural populations. The two major length variants, (Thr-Gly)20 and (Thr-Gly)17, show a highly significant latitudinal cline. In this study we present the complete sequence of the Thr-Gly region of 91 individuals from 6 natural populations of D. melanogaster, 5 from Europe and 1 from North Africa. We further characterized these 91 individuals for polymorphic sites in two other regions, one upstream and one downstream of the Thr-Gly repeat. We used the haplotypic combinations of Thr-Gly allele with flanking markers in an attempt to identify the mechanisms involved in the evolution of the D. melanogaster Thr-Gly region and to infer the phylogenetic relationship existing among the Thr-Gly alleles. We observe evidence for both intra- and interallelic mutational mechanisms, including replication slippage, unequal crossing-over, and gene conversion.