Abstract Motivation: Cancer biology is a field where the complexity of the phenomena battles against the availability of data. Often only a few observations per signal source, i.e. genes, are available. Such scenarios are becoming increasingly more relevant as modern sensing technologies generally have no trouble in measuring lots of channels, but where the number of subjects, such as patients or samples, is limited. In statistics, this problem falls under the heading ‘large p, small n’. Moreover, in such situations the use of asymptotic analytical results should generally be mistrusted. Results: We consider two cancer datasets, with the aim to mine the activity of functional groups of genes. We propose a hierarchical model with two layers in which the individual signals share a common variance component. A likelihood ratio test is defined for the difference between two collections of corresponding signals. The small number of observations requires a careful consideration of the bias of the statistic, which is corrected through an explicit Bartlett correction. The test is validated on Monte Carlo simulations, which show improved detection of differences compared with other methods. In a leukaemia study and a cancerous fibroblast cell line, we find that the method also works better in practice, i.e. it gives a richer picture of the underlying biology. Availability: The MATLAB code is available from the authors or on http://www.math.rug.nl/stat/Software. Contact: e.c.wit@rug.nl d.bakewell@liv.ac.uk