Always compare protein sequences if the genes encode proteins. Protein sequence comparison will typically double the evolutionary lookback time over DNA sequence comparison. If library sequences with E values less than 0.02 are found, the sequences are probably homologous, unless a low-complexity domain is aligned. However, sequences with similarity scores from 0.02 to 10.0 may be homologous as well. Additional family members should have E values less than 0.05.
Homologous sequences share a common ancestor, and thus a common protein fold.
Depending on the evolutionary distance and divergence path, two or more homologous sequences may have very few absolutely conserved residues. However, if homology has been inferred between A and B, between B and C, and between C and D, A and D must be homologous, even if they share no significant similarity. Sequences with marginal E values should also be tested using the PRSS program. Use the E value after 1000 shuffles to confirm an inference of homology. By following these steps, one will very rarely assert that two sequences are homologous when in fact they are not.