Multicellular eukaryotes have evolved a range of mechanisms for immune recognition. A widespread family involved in innate immunity are the NACHT-domain and leucine-rich-repeat-containing (NLR) proteins. Mammals have small numbers of NLR proteins, whereas in some species, mostly those without adaptive immune systems, NLRs have expanded into very large families. We describe a family of nearly 400 NLR proteins encoded in the zebrafish genome. The proteins share a defining overall structure, which arose in fishes after a fusion of the core NLR domains with a B30.2 domain, but can be subdivided into four groups based on their NACHT domains. Gene conversion acting differentially on the NACHT and B30.2 domains has shaped the family and created the groups. Evidence of positive selection in the B30.2 domain indicates that this domain rather than the leucine-rich repeats acts as the pathogen recognition module. In an unusual chromosomal organization, the majority of the genes are located on one chromosome arm, interspersed with other large multigene families, including a new family encoding zinc-finger proteins. The NLR-B30.2 proteins represent a new family with diversity in the specific recognition module that is present in fishes in spite of the parallel existence of an adaptive immune system.