We describe a novel sequencing approach that combines non-gel-based signature sequencing with in vitro cloning of millions of templates on separate 5 μm diameter microbeads. After constructing a microbead library of DNA templates by in vitro cloning, we assembled a planar array of a million template-containing microbeads in a flow cell at a density greater than 3× 10 6 microbeads/cm 2. Sequences of the free ends of the cloned templates on each microbead were then simultaneously analyzed using a fluorescence-based signature sequencing method that does not require DNA fragment separation. Signature sequences of 16–20 bases were obtained by repeated cycles of enzymatic cleavage with a type IIs restriction endonuclease, adaptor ligation, and sequence interrogation by encoded hybridization probes. The approach was validated by sequencing over 269,000 signatures from two cDNA libraries constructed from a fully sequenced strain of Saccharomyces cerevisiae, and by measuring gene expression levels in the human cell line THP-1. The approach provides an unprecedented depth of analysis permitting application of powerful statistical techniques for discovery of functional relationships among genes, whether known or unknown beforehand, or whether expressed at high or very low levels.