The mouse Ly49 and human killer cell immunoglobulin-like receptors (KIR) gene clusters encode activating and inhibitory class I MHC receptors on natural killer (NK) cells. A direct correlation between the presence of multiple activating KIR and various human autoimmune diseases including diabetes has been shown. Previous studies have implicated NK cell receptors in the development of diabetes in the non-obese diabetic (NOD) inbred mouse strain. To assess the contribution of Ly49 to NOD disease acceleration the Ly49 gene cluster of these mice was sequenced. Remarkably, the NOD Ly49 haplotype encodes the largest haplotype and the most functional activating Ly49 of any known mouse strain. These activating Ly49 include three Ly49p-related and two Ly49h-related genes. The NOD cluster contains large regions highly homologous to both C57BL/6 and 129 haplotypes, suggesting unequal crossing over as a mechanism of Ly49 haplotype evolution. Interestingly, the 129-like region has duplicated in the NOD genome. Thus, the NOD Ly49 cluster is a unique mix of elements seen in previously characterized Ly49 haplotypes resulting in a disproportionately large number of functional activating Ly49 genes. Finally, the functionality of activating Ly49 in NOD mice was confirmed in cytotoxicity assays.