Alternative splicing (AS) has the potential to greatly expand the functional repertoire of mammalian transcriptomes. However, few variant transcripts have been characterized functionally, making it difficult to assess the contribution of AS to the generation of phenotypic complexity and to study the evolution of splicing patterns. We have compared the AS of 309 protein-coding genes in the human ENCODE pilot regions against their mouse orthologs in unprecedented detail, utilizing traditional transcriptomic and RNAseq data. The conservation status of every transcript has been investigated, and each functionally categorized as coding (separated into coding sequence [CDS] or nonsense-mediated decay [NMD] linked) or noncoding. In total, 36.7% of human and 19.3% of mouse coding transcripts are species specific, and we observe a 3.6 times excess of human NMD transcripts compared with mouse; in contrast to previous studies, the majority of species-specific AS is unlinked to transposable elements. We observe one conserved CDS variant and one conserved NMD variant per 2.3 and 11.4 genes, respectively. Subsequently, we identify and characterize equivalent AS patterns for 22.9% of these CDS or NMD-linked events in nonmammalian vertebrate genomes, and our data indicate that functional NMD-linked AS is more widespread and ancient than previously thought. Furthermore, although we observe an association between conserved AS and elevated sequence conservation, as previously reported, we emphasize that 30% of conserved AS exons display sequence conservation below the average score for constitutive exons. In conclusion, we demonstrate the value of detailed comparative annotation in generating a comprehensive set of AS transcripts, increasing our understanding of AS evolution in vertebrates. Our data supports a model whereby the acquisition of functional AS has occurred throughout vertebrate evolution and is considered alongside amino acid change as a key mechanism in gene evolution.