Evidence is presented which supports a model proposing that differential RNA splicing events may be used in expression of genes of the endocrine system to generate alternative polypeptide hormones. We previously reported that variation in the expression of the gene encoding the small polypeptide hormone calcitonin is associated with the production of a new calcitonin-like or pseudo-calcitonin (psi Cal) mRNA. A plasmid containing psi Cal cDNA sequences has been constructed, and calcitonin genomic clones have been isolated. Hybridization analysis reveals that calcitonin and psi Cal sequences are chromosomally linked and are present in the same nuclear RNA transcripts. Both calcitonin and psi Cal mRNAs are functional and encode different polypeptide products. These data are compatible with the proposed model that alternative RNA splicing of the transcript(s) of the calcitonin gene ultimately results in the production of different polypeptide products.