MOTIVATION: As high-throughput transcriptome sequencing provides evidence for novel transcripts in many species, there is a renewed need for accurate methods to classify small genomic regions as protein coding or non-coding. We present PhyloCSF, a novel comparative genomics method that analyzes a multispecies nucleotide sequence alignment to determine whether it is likely to represent a conserved protein-coding region, based on a formal statistical comparison of phylogenetic codon models. RESULTS: We show that PhyloCSF's classification performance in 12-species Drosophila genome alignments exceeds all other methods we compared in a previous study. We anticipate that this method will be widely applicable as the transcriptomes of many additional species, tissues and subcellular compartments are sequenced, particularly in the context of ENCODE and modENCODE, and as interest grows in long non-coding RNAs, often initially recognized by their lack of protein coding potential rather than conserved RNA secondary structures. AVAILABILITY AND IMPLEMENTATION: The Objective Caml source code and executables for GNU/Linux and Mac OS X are freely available at http://compbio.mit.edu/PhyloCSF CONTACT: [email protected]; [email protected].