While most multiple sequence alignment programs expect that all or most of their input is known to be homologous, and penalise insertions and deletions, this is not a reasonable assumption for non-coding DNA, which is much less strongly conserved than protein-coding genes. Arguing that the goal of sequence alignment should be the detection of homology and not similarity, we incorporate an evolutionary model into a previously published multiple sequence alignment program for non-coding DNA, Sigma, as a sensitive likelihood-based way to assess the significance of alignments. Version 1 of Sigma was successful in eliminating spurious alignments but exhibited relatively poor sensitivity on synthetic data. Sigma 1 used a p-value (the probability under the null hypothesis of non-homology) to assess the significance of alignments, and, optionally, a background model that captured short-range genomic correlations. Sigma version 2, described here, retains these features, but calculates the p-value using a sophisticated evolutionary model that we describe here, and also allows for a transition matrix for different substitution rates from and to different nucleotides. Our evolutionary model takes separate account of mutation and fixation, and can be extended to allow for locally differing functional constraints on sequence.