In the fungus Pneumocystis carinii, at least three gene families (PRT1, MSR, and MSG) have the potential to generate high-frequency antigenic variation, which is likely to be a strategy by which this parasitic fungus is able to prolong its survival in the rat lung. Members of these gene families are clustered at chromosome termini, a location that fosters recombination, which has been implicated in selective expression of MSG genes. To gain insight into the architecture, evolution, and regulation of these gene clusters, six telomeric segments of the genome were sequenced. Each of the segments began with one or more unique genes, after which were members of different gene families, arranged in a head-to-tail array. The three-gene repeat PRT1-MSR-MSG was common, suggesting that duplications of these repeats have contributed to expansion of all three families. However, members of a gene family in an array were no more similar to one another than to members in other arrays, indicating rapid divergence after duplication. The intergenic spacers were more conserved than the genes and contained sequence motifs also present in subtelomeres, which in other species have been implicated in gene expression and recombination. Long mononucleotide tracts were present in some MSR genes. These unstable sequences can be expected to suffer frequent frameshift mutations, providing P. carinii with another mechanism to generate antigen variation.