The antigen-binding site of the camel heavy-chain antibodies devoid of light chain consists of a single variable domain (V(H)H) that obviously lacks the V(H)-V(L) combinatorial diversity. To evaluate the extent of the V(H)H antigen-binding repertoire, a germline database was constructed from PCR-amplified V(H)H/V(H) segments of a single specimen of Camelus dromedarius. A total of 33 V(H)H and 39 V()H unique sequences were identified, encoded by 42 and 50 different genes, respectively. Sequence comparison indicates that the V(H)Hs evolved within the V(H) subgroup III. Nevertheless, the V(H)H germline segments are highly diverse, leading to a broad structural repertoire of the antigen-binding loops. Seven V(H)H subfamilies were recognized, of which five were confirmed to be expressed in vivo. Comparison of germline and cDNA sequences demonstrates that the rearranged V(H)Hs are extensively diversified by somatic mutation processes, leading to an additional hypervariable region and a high incidence of nucleotide insertions or deletions. These diversification processes are driven by hypermutation and recombination hotspots embedded in the V(H)H germline genes at the regions affecting the structure of the antigen-binding loops.