Wheat and maize genes were hypothesized to be clustered into islands but the hypothesis was not statistically tested. The hypothesis is statistically tested here in four grass species differing in genome size, Brachypodium distachyon, Oryza sativa, Sorghum bicolor, and Aegilops tauschii. Density functions obtained under a model where gene locations follow a homogeneous Poisson process and thus are not clustered are compared with a model-free situation quantified through a non-parametric density estimate. A simple homogeneous Poisson model for gene locations is not rejected for the small O. sativa and B. distachyon genomes, indicating that genes are distributed largely uniformly in those species, but is rejected for the larger S. bicolor and Ae. tauschii genomes, providing evidence for clustering of genes into islands. It is proposed to call the gene islands "gene insulae" to distinguish them from other types of gene clustering that have been proposed. An average S. bicolor and Ae. tauschii insula is estimated to contain 3.7 and 3.9 genes with an average intergenic distance within an insula of 2.1 and 16.5 kb, respectively. Inter-insular distances are greater than 8 and 81 kb and average 15.1 and 205 kb, in S. bicolor and Ae. tauschii, respectively. A greater gene density observed in the distal regions of the Ae. tauschii chromosomes is shown to be primarily caused by shortening of inter-insular distances. The comparison of the four grass genomes suggests that gene locations are largely a function of a homogeneous Poisson process in small genomes. Nonrandom insertions of LTR retroelements during genome expansion creates gene insulae, which become less dense and further apart with the increase in genome size. High concordance in relative lengths of orthologous intergenic distances among the investigated genomes including the maize genome suggests functional constraints on gene distribution in the grass genomes.