Currently there are no tools specifically designed for annotating genes in phages. Several tools are available that have been adapted to run on phage genomes, but due to their underlying design, they are unable to capture the full complexity of phage genomes. Phages have adapted their genomes to be extremely compact, having adjacent genes that overlap and genes completely inside of other longer genes. This non-delineated genome structure makes it difficult for gene prediction using the currently available gene annotators. Here we present PHANOTATE, a novel method for gene calling specifically designed for phage genomes. Although the compact nature of genes in phages is a problem for current gene annotators, we exploit this property by treating a phage genome as a network of paths: where open reading frames are favorable, and overlaps and gaps are less favorable, but still possible. We represent this network of connections as a weighted graph, and use dynamic programing to find the optimal path.