The evolution of the IGF binding protein (IGFBP) gene family has been difficult to resolve. Both chromosomal and serial duplications have been suggested as mechanisms for the expansion of this gene family. We have identified and annotated IGFBP sequences from a wide selection of vertebrate species as well as Branchiostoma floridae and Ciona intestinalis. By combining detailed sequence analysis with sequence-based phylogenies and chromosome information, we arrive at the following scenario: the ancestral chordate IGFBP gene underwent a local gene duplication, resulting in a gene pair adjacent to a HOX cluster. Subsequently, the gene family expanded in the two basal vertebrate tetraploidization (2R) resulting in the six IGFBP types that are presently found in placental mammals. The teleost fish ancestor underwent a third tetraploidization (3R) that further expanded the IGFBP repertoire. The five sequenced teleost fish genomes retain 9-11 of IGFBP genes. This scenario is supported by the phylogenies of three adjacent gene families in the HOX gene regions, namely the epidermal growth factor receptors (EGFR) and the Ikaros and distal-less (DLX) transcription factors. Our sequence comparisons show that several important structural components in the IGFBPs are ancestral vertebrate features that have been maintained in all orthologs, for instance the integrin interaction motif Arg-Gly-Asp in IGFBP-2. In contrast, the Arg-Gly-Asp motif in IGFBP-1 has arisen independently in mammals. The large degree of retention of IGFBP genes after the ancient expansion of the gene family strongly suggests that each gene evolved distinct and important functions early in vertebrate evolution.