The ref(2)P locus (2-54.2) is polymorphic for two allelic forms in natural populations of Drosophila melanogaster, ref(2)Po and ref(2)Pp. The latter allele confers resistance to the rhabdovirus sigma infecting wild populations. Previous work, based on a small sample of prescreened restrictive (resistant) and permissive (susceptible) alleles, identified a large number of amino acid replacement changes (7) relative to synonymous changes (1). Such protein variability could be the result of variation-enhancing selection. To further test the selection hypothesis, we have examined the DNA sequences of ten randomly chosen lines of D. melanogaster and one line of D. simulans. Nine of the ten lines are permissive; D. simulans does not harbor the virus. The melanogaster alleles contain 4 synonymous changes, 19 noncoding changes, and 13 amino acid replacement changes, indicating a relatively high level of polymorphism. Three sequenced restrictive alleles have nearly identical sequences, indicating that they are relatively young. Compared to the permissive alleles, they share only a complex deletion at codon 34, CAG-AAT to GGA, which our analysis indicates to be the site conferring the restrictive phenotype. Patterns of polymorphism and divergence differ from neutral predictions by several criteria for the amino terminal region, which contains the complex deletion (codons 1-91), but not the remainder of the protein (codons 92-599). We find a higher rate of evolution on the D. melanogaster lineage than on the D. simulans lineage. The relatively large amount of both replacement and silent polymorphism in the permissive alleles and the lack of divergence between permissive and restrictive alleles suggests that the sigma virus and ref(2)P may be engaged in an evolutionary race in which new restrictive alleles are continually arising but are relatively short-lived.