GRP78, a 78-kDa protein localized in the endoplasmic reticulum, is a member of the HSP70 protein family. However, unlike hsp70 which is intronless and belongs to a multigene family, grp78 is a single copy gene and contains intervening sequences. In this aspect, the grp78 gene resembles more closely that of the constitutively expressed heat shock cognate gene, hsc73. In this report, we compare the grp78 and hsc73 genes and show that: (1) the intron/exon junctions of the two genes are not conserved, but occur at similar positions; (2) while the protein sequences are highly conserved, being 62% identical, the conservation is concentrated at discrete regions over the N-terminal three-fourths of the protein; (3) this conservation represents the ATP binding and structural domains shared among the members of the HSP70 family; (4) the C-terminus is highly divergent and likely represents domains specific for the individual family members; and (5) sequences partially homologous to the grp78 5' UTR and signal sequence, which targets GRP78 into the ER, are found within an additional first intron of hsc73. The evolutionary implications of these two genes are discussed.