As an evolutionist I am very happy to see the concepts of homology,
orthology and paralogy being clarified here! The only point that I think
needs further comment is the role that similarity plays in the recognition
of homology. If we assume that all life traces back to a single gene-like
ancestor then at some level all genes are homologous with all other genes.
The issue is not "are they homologous?", but, "how recently do they share
common ancestry?" Thus, all questions of homology are intrinsically
questions of phylogeny (as emphasized by Gheeta Bharathan). Therefore, we
should not expect that there is some magic threshold of similarity that
"proves" that the genes are homologous. Rather, sequence similarity is
important because it provides one (if probably not the best) guide to the
phylogenetic placement of a given gene sequence.
A useful reference and discussion of the concept of homology as applied to
molecular biology is:
Patterson, C. 1988. Homology in classical and molecular biology. Mol. Biol.
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