ABSTRACT: BACKGROUND: In prokaryotic genomes, genes are organized in operons, and the genes within an operon tend to have similar levels of expression. Because of co-transcription of genes within an operon, borrowing information from other genes within the same operon can improve the estimation of relative transcript levels; the estimation of relative levels of transcript abundances is one of the most challenging tasks in experimental genomics due to the high noise level in microarray data. Therefore, techniques that can improve such estimations, and moreover are based on sound biological premises, are expected to benefit the field of microarray data analysis RESULTS: In this paper, we propose a hierarchical Bayesian model, which relies on borrowing information from other genes within the same operon, to improve the estimation of gene expression levels and, hence, the detection of differentially expressed genes. The simulation studies and the analysis of experiential data demonstrated that the proposed method outperformed other techniques that are routinely used to estimate transcript levels and detect differentially expressed genes, including the sample mean and SAM t statistics. The improvement became more significant as the noise level in microarray data increases. CONCLUSION: By borrowing information about transcriptional activity of genes within classified operons, we improved the estimation of gene expression levels and the detection of differentially expressed genes.