An improved method was developed to align related protein sequences and search for homology. A glutamine amide transfer domain was identified in an NH2-terminal amide transfer domain was identified in an NH2-terminal segment of GMP synthetase from Escherichia coli. Amino acid residues 1-198 GMP synthetase are homologous with the glutamine amide transfer domain in trpG.D-encoded anthranilate synthase component II-anthranilate phosphoriboyltransferase and the related pabA-encoded p-aminobenzoate synthase component II. This result supprts a model for gene fusion in which a trpG-related glutamine amide transfer domain was recruited to augment the function of a primitive NH3-dependent GMP synthetase. Sequence analyses emphasize that glutamine amide transfer domains are thus far found only at the NH2 terminus of fused proteins. Two rules are formulated to explain trpG and trpG-related fusions. (i) trpG and trpG-related genes must have translocated immediately upstream of genes destined for fusion in order to position a glutamine amide transfer domain at the NH2 terminus after fusion. (ii) trpG and trpG-related genes could not translocate adjacent to a regulatory region at the 5' end of an operon. These rules explain known trpG-like fusions and explain why trpG and pabA are not fused to trpE and pabB, respectively. Alignment searches of GMP synthetase with two other enzymes that bind GMP, E. coli amidophosphoribosyltransferase and human hypoxanthine-guanine phosphoribosyltransferase, suggest a structurally homologous segment which may constitute a GMP binding site.