Microbial genomes contain an abundance of genes with conserved proximity forming clusters on the chromosome. However, the conservation can be a result of many factors such as vertical inheritance, or functional selection. Thus, identification of conserved gene clusters that are under functional selection provides an effective channel for gene annotation, microarray screening, and pathway reconstruction. The problem of devising a robust method to identify these conserved gene clusters and to evaluate the significance of the conservation in multiple genomes has a number of implications for comparative, evolutionary and functional genomics as well as synthetic biology.