AbstractOperons are clusters of genes that are transcribed as a single message, and regulated by the same gene expression machinery. They are found primarily in prokaryotic genomes. Because genes in the same operon are likely to have related functions, identification of the operon structure is potentially useful for assigning gene function. We report the development and benchmarking of two different methods for detecting operons, based on an analysis of 42 fully sequenced prokaryotic organisms. The Gene Neighbor method (GNM) utilizes the relatively high conservation of gene order in operons, compared with genes in general. The Gene Gap Method (GGM) makes use of the relatively short gap between genes in operons compared with that otherwise found between adjacent genes. The methods have been benchmarked using KEGG pathway data and RegulonDB Escherichia coli operon data. With optimum parameters, the specificity of the GNM is 93% and the sensitivity is 70%. For the GGM, the specificity is 95% and the sensitivity is 68%. Together, the two methods have a sensitivity of 87.2%, while joint predictions have a sensitivity of 50% and a specificity of 98%. The methods are used to infer possible functions for some hypothetical genes in prokaryotic genomes. The methods have proven a useful addition to structure information in deriving protein function in a structural genomics project. Proteins 2006. © 2006 Wiley‐Liss, Inc.