DNA shuffling is a powerful process for directed evolution, which generates diversity by recombination, combining useful mutations from individual genes. Libraries of chimaeric genes can be generated by random fragmentation of a pool of related genes, followed by reassembly of the fragments in a self-priming polymerase reaction. Template switching causes crossovers in areas of sequence homology. Our previous studies used single genes and random point mutations as the source of diversity. An alternative source of diversity is naturally occurring homologous genes, which provide 'functional diversity'. To evaluate whether natural diversity could accelerate the evolution process, we compared the efficiency of obtaining moxalactamase activity from four cephalosporinase genes evolved separately with that from a mixed pool of the four genes. A single cycle of shuffling yielded eightfold improvements from the four separately evolved genes, versus a 270- to 540-fold improvement from the four genes shuffled together, a 50-fold increase per cycle of shuffling. The best clone contained eight segments from three of the four genes as well as 33 amino-acid point mutations. Molecular breeding by shuffling can efficiently mix sequences from different species, unlike traditional breeding techniques. The power of family shuffling may arise from sparse sampling of a larger portion of sequence space.