Mutations in the beta-amyloid precursor protein (APP) gene are associated with some forms of Familial Alzheimer's Disease. The human APP gene is large, the 19 exons span approximately 300 kb, and AT-rich, at 40% GC. We have examined the genomic structure and cDNA sequence of the APP gene in the pufferfish Fugu rubripes and Tetraodon fluviatilis, respectively. In contrast to human, the Fugu APP gene spans less than 10 kb of DNA, with the introns compacted 48-fold on average. Two axons, alternatively processed in humans, are absent in both pufferfish. APP is the largest, most AT-rich gene examined in Fugu and is also the most highly compressed. The genomic sequences spanning the human and the Fugu APP genes were analysed with a set of exon and gene prediction programs. Results show that these are highly reliable for the Fugu gene with lower false positive and false negative rates than are seen in the analysis of the human gene. Comparative analysis of Fugu sequences homologous to very AT-rich regions in the human genome may, therefore, be advantageous in gene-finding efforts, both for their highly reduced sizes and their reliable gene predictions.