The region surrounding the dopa decarboxylase gene (Ddc) of Drosophila contains a cluster of genes, many of which appear to be functionally related by virtue of their effects on cuticle development and/or catecholamine metabolism. In this report we describe evidence that the Ddc gene and the closely linked alpha-methyldopa hypersensitive (amd) gene share extensive sequence homology and are the products of a gene duplication event. The two genes are transcribed convergently and are separated by 2.4 kb. A gene located between Ddc and amd expresses a 2.0-kb mRNA and appears to partially overlap the Ddc gene. The organization of these transcripts implies a complex series of events giving rise to the present pattern. The patterns of expression of these genes do not support a model of coordinate regulation, but are more consistent with a pattern of duplication and divergence to various related metabolic subspecialties. These data provide the first evidence for structural relationships among genes in the 37C cluster.