Olfactory receptor (OR) genes form the largest multigene family in mammalian genomes. Humans have approximately 800 OR genes, but >50% of them are pseudogenes. By contrast, mice have approximately 1400 OR genes and pseudogenes are approximately 25%. To understand the evolutionary processes that shaped the difference of OR gene families between humans and mice, we studied the genomic locations of all human and mouse OR genes and conducted a detailed phylogenetic analysis using functional genes and pseudogenes. We identified 40 phylogenetic clades with high bootstrap supports, most of which contain both human and mouse genes. Interestingly, a particular clade contains approximately 100 pseudogenes in humans, whereas the numbers of pseudogenes are <20 for most of the mouse clades. We also found that the organization of OR genomic clusters is well conserved between humans and mice in many chromosomal locations. Despite the difference in the numbers of genes, the numbers of large genomic clusters are nearly the same for humans and mice. These observations suggest that the greater OR gene repertoire in mice has been generated mainly by tandem gene duplication within each genomic cluster.