The nonapeptide hormones arginine vasopressin (AVP) and oxytocin (OT) are synthesized in the hypothalamus together with their carrier proteins, the neurophysins, as common polypeptide precursors. The organization of these precursors has been established by sequence determination of cloned bovine cDNAs encoding prepro-arginine vasopressin-neurophysin II (prepro-AVP-NPII) and prepro-oxytocin-neurophysin I (prepro-OT-NPI). When the mRNA sequences coding for the conserved middle part of the neurophysins were compared, we found that these sequences are not merely similar but identical. The primary structure of the chromosomal genes now determined shows that both genes, which appear to have arisen by a gene duplication, are split into three exons, each encoding a functional domain of the precursor polypeptide. Sequence comparison reveals that the stretch of sequence identity within the two mRNAs is probably the result of a gene conversion encompassing exon B, which encodes the conserved part of the neurophysins, and part of the preceding intron.