The exons, their boundaries, and approximately half of the intronic deoxyribonucleic acid of the rat serum albumin gene were sequenced. In addition to the 14 exons identified earlier by R-loop analysis, a small exon was detected between the "leader" exon (Z) and exon B. The leader exon encoded the 5'-untranslated portion of albumin messenger ribonucleic acid and the "pre-pro" oligopeptide present on the nascent protein. The sites of initiation and termination of transcription were tentatively identified by comparison of the 5' and 3' gene-flanking sequences with those of other eucaryotic genes. All 28 intron/exon junctions conformed to the "GT-AG rule" (Breathnach et al., Proc. Natl. Acad. Sci. 75:4853-4857, 1978). The three homologous domains of albumin were encoded by three subgenes that consisted of four exons each and evolved by intragenic duplication of a common ancestor. The second and forth exons of each subgene appeared to be the result of an even earlier duplication event. We propose a model for the evolution of this gene that accounts for the observed patterns of exon size and homology.