BACKGROUND: Sequencing and annotation of the genome of rice (Oryza sativa) have generated gene models in numbers that top all other fully sequenced species, with many lacking recognizable sequence homology to known genes. Experimental evaluation of these gene models and identification of new models will facilitate rice genome annotation and the application of this knowledge to other more complex cereal genomes. RESULTS: We report here an analysis of the chromosome 10 transcriptome of the two major rice subspecies, japonica and indica, using oligonucleotide tiling microarrays. This analysis detected expression of approximately three-quarters of the gene models without previous experimental evidence in both subspecies. Cloning and sequence analysis of the previously unsupported models suggests that the predicted gene structure of nearly half of those models needs improvement. Coupled with comparative gene model mapping, the tiling microarray analysis identified 549 new models for the japonica chromosome, representing an 18% increase in the annotated protein-coding capacity. Furthermore, an asymmetric distribution of genome elements along the chromosome was found that coincides with the cytological definition of the heterochromatin and euchromatin domains. The heterochromatin domain appears to associate with distinct chromosome level transcriptional activities under normal and stress conditions. CONCLUSION: These results demonstrated the utility of genome tiling microarray in evaluating annotated rice gene models and in identifying novel transcriptional units. The tiling microarray sanalysis further revealed a chromosome-wide transcription pattern that suggests a role for transposable element-enriched heterochromatin in shaping global transcription in response to environmental changes in rice.