This paper describes a new system, GLIMMER, for finding genes in microbial genomes. In a series of tests on Haemophilus influenzae , Helicobacter pylori and other complete microbial genomes, this system has proven to be very accurate at locating virtually all the genes in these sequences, outperforming previous methods. A conservative estimate based on experiments on H.pylori and H. influenzae is that the system finds >97% of all genes. GLIMMER uses interpolated Markov models (IMMs) as a framework for capturing dependencies between nearby nucleotides in a DNA sequence. An IMM-based method makes predictions based on a variable context; i.e., a variable-length oligomer in a DNA sequence. The context used by GLIMMER changes depending on the local composition of the sequence. As a result, GLIMMER is more flexible and more powerful than fixed-order Markov methods, which have previously been the primary content-based technique for finding genes in microbial DNA.