Ly49 genes regulate the cytotoxic activity of natural killer (NK) cells in rodents and provide important protection against virus-infected or tumor cells. About 15 Ly49 genes have been identified in mice, but only a few genes have been reported to date in rats. Here we studied all Ly49 genes in the entire rat genome sequence and identified 17 putative functional and 16 putative non-functional genes together with their genomic locations in a 1.8-Mb region of chromosome 4. Phylogenetic analysis of these genes indicated that the Ly49 gene family expanded rapidly in recent years, and this expansion was mediated by both tandem and genomic block duplication. The joint phylogenetic analysis of mouse and rat genes suggested that the most recent common ancestor of the two species had at least several Ly49 genes, but that the majority of current duplicate genes were generated after divergence of the two species. In both species Ly49 genes are apparently subject to birth-and-death evolution, but the birth and death rates of Ly49 genes are higher in rats than in mice. The rate of gene expansion in the Ly49 gene family in rats is one of the highest among all mammalian multigene families so far studied. The biochemical function of Ly49 genes is essentially the same as that of KIR genes in primates, but the molecular structures of the two groups of NK cell receptors are very different. A hypothesis was presented to explain the origin of the differential use of Ly49 and KIR genes in rodents and primates.