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Regions of the genome not coding for proteins or not involved in cis-acting regulatory activities are frequently viewed as lacking in functional value. However, a number of recent large-scale studies have revealed significant regulated transcription of unannotated portions of a variety of plant and animal genomes, allowing a new appreciation of the widespread transcription of large portions of the genome. High-resolution mapping of the sites of transcription of the human and fly genomes has provided an alternative picture of the extent and organization of transcription and has offered insights for biological functions of some of the newly identified unannotated transcripts. Considerable portions of the unannotated transcription observed are developmental or cell-type-specific parts of protein-coding transcripts, often serving as novel, alternative 5' transcriptional start sites. These distal 5' portions are often situated at significant distances from the annotated gene and alternatively join with or ignore portions of other intervening genes to comprise novel unannotated protein-coding transcripts. These data support an interlaced model of the genome in which many regions serve multifunctional purposes and are highly modular in their utilization. This model illustrates the underappreciated organizational complexity of the genome and one of the functional roles of transcription from unannotated portions of the genome.