There is increasing evidence in eukaryotic genomes that gene order is not random, even allowing for tandem duplication. Notably, in numerous genomes(1-6), genes of similar expression tend to be clustered. Are there other reasons for clustering of functionally similar genes? If genes are linked to enable genetic, rather than physical clustering, then we also expect that clusters of certain genes might be associated with blocks of reduced recombination rates. Here we show that, in yeast, essential genes are highly clustered and this clustering is independent of clustering of co-expressed genes and of tandem duplications. Adjacent pairs of essential genes are preferentially conserved through evolution. Notably, we also find that clusters of essential genes are in regions of low recombination and that larger clusters have lower recombination rates. These results suggest that selection acts to modify both the fine-scale intragenomic variation in the recombination rate and the distribution of genes and provide evidence for co-evolution of gene order and recombination rate.