Despite the power of massively parallel sequencing platforms, a drawback is the short length of the sequence reads produced. We demonstrate that short reads can be locally assembled into longer contigs using paired-end sequencing of restriction-site associated DNA (RAD-PE) fragments. We use this RAD-PE contig approach to identify single nucleotide polymorphisms (SNPs) and determine haplotype structure in threespine stickleback and to sequence E. coli and stickleback genomic DNA with overlapping contigs of several hundred nucleotides. We also demonstrate that adding a circularization step allows the local assembly of contigs up to 5 kilobases (kb) in length. The ease of assembly and accuracy of the individual contigs produced from each RAD site sequence suggests RAD-PE sequencing is a useful way to convert genome-wide short reads into individually-assembled sequences hundreds or thousands of nucleotides long.