The variable domains of the functional heavy-chain antibodies (VHHs) discovered in camels are related to the human VH subgroup III. They are nevertheless clearly distinguishable from the VHs of conventional four-chain immunoglobulins by the presence of important amino acid substitutions, located in the solvent-exposed surface normally covered by the variable domain of the light chain. The analysis of an unrearranged dromedary DNA library revealed that the specific VHH gene with its characteristic amino acid substitutions is encoded in the germline. Therefore, it is concluded that the VHHs do not arise through an ontogenic process of somatic hypermutation. The presence of putative DNA recombination signals that are more prevalent in the camel VHH, compared to the VH germline gene, might play a role in the formation and efficient expansion of the VHH repertoire.