Previously, we introduced a neural network system predicting locations of transmembrane helices (HTMs) based on evolutionary profiles (PHDhtm, Rost B, Casadio R, Fariselli P, Sander C, 1995, Protein Sci 4:521-533). Here, we describe an improvement and an extension of that system. The improvement is achieved by a dynamic programming-like algorithm that optimizes helices compatible with the neural network output. The extension is the prediction of topology (orientation of first loop region with respect to membrane) by applying to the refined prediction the observation that positively charged residues are more abundant in extra-cytoplasmic regions. Furthermore, we introduce a method to reduce the number of false positives, i.e., proteins falsely predicted with membrane helices. The evaluation of prediction accuracy is based on a cross-validation and a double-blind test set (in total 131 proteins). The final method appears to be more accurate than other methods published: (1) For almost 89% (+/-3%) of the test proteins, all HTMs are predicted correctly. (2) For more than 86% (+/-3%) of the proteins, topology is predicted correctly. (3) We define reliability indices that correlate with prediction accuracy: for one half of the proteins, segment accuracy raises to 98%; and for two-thirds, accuracy of topology prediction is 95%. (4) The rate of proteins for which HTMs are predicted falsely is below 2% (+/-1%). Finally, the method is applied to 1,616 sequences of Haemophilus influenzae. We predict 19% of the genome sequences to contain one or more HTMs. This appears to be lower than what we predicted previously for the yeast VIII chromosome (about 25%).