Members of cytochrome P450 subfamily 1A (CYP1As) are involved in detoxification and bioactivation of common environmental pollutants. Understanding the functional evolution of these genes is essential to predicting and interpreting species differences in sensitivity to toxicity caused by such chemicals. The CYP1A gene subfamily comprises a single ancestral representative in most fish species and two paralogs in higher vertebrates, including birds and mammals. Phylogenetic analysis of complete coding sequences suggests that mammalian and bird paralog pairs (CYP1A1/2 and CYP1A4/5, respectively) are the result of independent gene duplication events. However, comparison of vertebrate genome sequences revealed that CYP1A genes lie within an extended region of conserved fine-scale synteny, suggesting that avian and mammalian CYP1A paralogs share a common genomic history. Algorithms designed to detect recombination between nucleotide sequences indicate that gene conversion has homogenized most of the length of the chicken CYP1A genes, as well as the 5′ end of mammalian CYP1As. Together, these data indicate that avian and mammalian CYP1A paralog pairs resulted from a single gene duplication event and that extensive gene conversion is responsible for the exceptionally high degree of sequence similarity between CYP1A4 and CYP1A5. Elevated nonsynonymous/synonymous substitution ratios within a putatively unconverted stretch of ∼250 bp suggests that positive selection may have reduced the effective rate of gene conversion in this region, which contains two substrate recognition sites. This work significantly alters our understanding of functional evolution in the CYP1A subfamily, suggesting that gene conversion and positive selection have been the dominant processes of sequence evolution.