Oxytocin and vasopressin are structurally related mammalian neurohypophysial hormones with distinct physiological activities. Homologues of these two hormones are found in all vertebrate groups except the primitive cyclostomes in which only a vasopressin-like hormone has been reported so far. Genes encoding the mammalian oxytocin and vasopressin hormone precursors exhibit a similar genomic organisation, and are closely linked (3.5 kb to 12 kb apart) in a tail-to-tail manner suggesting a common evolutionary origin. However, no linkage among genes of the vasopressin/oxytocin family has been demonstrated in any of the lower vertebrates. The Japanese pufferfish, Fugu rubripes, has been shown to have a very compact genome of about 400 Mb with very few repetitive sequences. We used this model vertebrate genome to analyse the genomic organisation of vasotocin and isotocin genes, the teleost homologues of vasopressin and oxytocin. We have cloned and mapped the vasotocin/isotocin locus in Fugu and obtained complete nucleotide sequences of the vasotocin and isotocin genes. The coding sequences of the Fugu vasotocin and isotocin genes are interrupted by two introns at identical positions, similar to their homologues in higher vertebrates. The deduced amino acid sequences as well as the coding sequences of the two genes show high homology in the neurophysin region. Furthermore, the two genes are linked in a tandem manner with an intergenic region of about 20 kb. Random sequencing has shown that there are at least two known vertebrate genes in the intergenic region. Genomic organisation of the Fugu vasotocin/isotocin locus suggests that the teleost vasotocin and isotocin genes have evolved from a common ancestor through tandem duplication and that this locus seems to have undergone a localised reorganisation during vertebrate evolution.