In alternative expression analysis by sequencing (ALEXA-seq), we developed a method to analyze massively parallel RNA sequence data to catalog transcripts and assess differential and alternative expression of known and predicted mRNA isoforms in cells and tissues. As proof of principle, we used the approach to compare fluorouracil-resistant and -nonresistant human colorectal cancer cell lines. We assessed the sensitivity and specificity of the approach by comparison to exon tiling and splicing microarrays and validated the results with reverse transcription-PCR, quantitative PCR and Sanger sequencing. We observed global disruption of splicing in fluorouracil-resistant cells characterized by expression of new mRNA isoforms resulting from exon skipping, alternative splice site usage and intron retention. Alternative expression annotation databases, source code, a data viewer and other resources to facilitate analysis are available at http://www.alexaplatform.org/alexa_seq/.