Animals and plants have evolved a range of mechanisms for recognizing noxious substances and organisms. A particular challenge, most successfully met by the adaptive immune system in vertebrates, is the specific recognition of potential pathogens, which themselves evolve to escape recognition. A variety of genomic and evolutionary mechanisms shape large families of proteins dedicated to detecting pathogens and create the diversity of binding sites needed for epitope recognition. One family involved in innate immunity are the NACHT-domain-and Leucine-Rich-Repeat-containing (NLR) proteins. Mammals have a small number of NLR proteins, which are involved in first-line immune defense and recognize several conserved molecular patterns. However, there is no evidence that they cover a wider spectrum of differential pathogenic epitopes. In other species, mostly those without adaptive immune systems, NLRs have expanded into very large families. A family of nearly 400 NLR proteins is encoded in the zebrafish genome. They are subdivided into four groups defined by their NACHT and effector domains, with a characteristic overall structure that arose in fishes from a fusion of the NLR domains with a domain used for immune recognition, the B30.2 domain. The majority of the genes are located on one chromosome arm, interspersed with other large multi-gene families, including a new family encoding proteins with multiple tandem arrays of Zinc fingers. This chromosome arm may be a hot spot for evolutionary change in the zebrafish genome. NLR genes not on this chromosome tend to be located near chromosomal ends. Extensive duplication, loss of genes and domains, exon shuffling and gene conversion acting differentially on the NACHT and B30.2 domains have shaped the family. Its four groups, which are conserved across the fishes, are homogenised within each group by gene conversion, while the B30.2 domain is subject to gene conversion across the groups. Evidence of positive selection on diversifying mutations in the B30.2 domain, probably driven by pathogen interactions, indicates that this domain rather than the LRRs acts as a recognition domain. 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.