The nucleotide sequence of bacteriophage T3 DNA, from gene 2.5 through gene 9 has been determined. In addition to regulatory sites, the sequence predicts 19 close-packed genes plus two genes that overlap, in a different reading frame, another gene. The majority of these genes are highly homologous to those in the corresponding region of bacteriophage T7. However, there are some genes that are present in one, but not the other, phage. These apparent deletions are almost exactly gene size and thus the close-packed organization of genes remains the same in T3 as in T7. The varying levels of homology between T3 and T7 DNAs, first noted by Davis and Hyman in their study of DNA heteroduplexes, are also demonstrated here by a comparison of T3 and T7 nucleotide sequences. Many regions of extremely high homology immediately abut sequences that have no apparent homology. These data suggest that bacteriophages T3 and T7 have recombined, both with each other and with other members of a pool of T7-like phages, during their co-evolution.