In many eukaryotic species, gene order is not random. In humans, flies, and yeast, there is clustering of coexpressed genes that cannot be explained as a trivial consequence of tandem duplication. In the worm genome this is taken a step further with many genes being organized into operons. Here we analyze the relationship between gene location and expression in Caenorhabditis elegans and find evidence for at least three different processes resulting in local expression similarity. Not surprisingly, the strongest effect comes from genes organized in operons. However, coexpression within operons is not perfect, and is influenced by some distance-dependent regulation. Beyond operons, there is a relationship between physical distance, expression similarity, and sequence similarity, acting over several megabases. This is consistent with a model of tandem duplicate genes diverging over time in sequence and expression pattern, while moving apart owing to chromosomal rearrangements. However, at a very local level, nonduplicate genes on opposite strands (hence not in operons) show similar expression patterns. This suggests that such genes may share regulatory elements or be regulated at the level of chromatin structure. The central importance of tandem duplicate genes in these patterns renders the worm genome different from both yeast and human.