Gene duplication has long been considered an important force in genome evolution. In this article, I consider families of tandemly duplicated genes that show 'microfunctionalization' - genes encoding similar proteins with subtly different functions, such as olfactory receptors. I discuss the genomic processes giving rise to such microfunctionalized gene families and suggest that, like sites of chromosomal rearrangement and breakage, they are associated with relatively high concentrations of repetitive elements. I suggest that microfunctionalized gene families arise within gene factories: genomic regions rich in repetitive elements that undergo increased levels of unequal crossing-over.
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