There are currently a large number of orphan G-protein-coupled receptors (GPCRs) whose endogenous ligands (peptide hormones) are unknown. Identification of these peptide hormones is a difficult and important problem. We describe a computational framework that models spatial structure along the genomic sequence simultaneously with the temporal evolutionary path structure across species and show how such models can be used to discover new functional molecules, in particular peptide hormones, via cross-genomic sequence comparisons. The computational framework incorporates a priori high-level knowledge of structural and evolutionary constraints into a hierarchical grammar of evolutionary probabilistic models. This computational method was used for identifying novel prohormones and the processed peptide sites by producing sequence alignments across many species at the functional-element level. Experimental results with an initial implementation of the algorithm were used to identify potential prohormones by comparing the human and non-human proteins in the Swiss-Prot database of known annotated proteins. In this proof of concept, we identified 45 out of 54 prohormones with only 44 false positives. The comparison of known and hypothetical human and mouse proteins resulted in the identification of a novel putative prohormone with at least four potential neuropeptides. Finally, in order to validate the computational methodology, we present the basic molecular biological characterization of the novel putative peptide hormone, including its identification and regional localization in the brain. This species comparison, HMM-based computational approach succeeded in identifying a previously undiscovered neuropeptide from whole genome protein sequences. This novel putative peptide hormone is found in discreet brain regions as well as other organs. The success of this approach will have a great impact on our understanding of GPCRs and associated pathways and help to identify new targets for drug development.