Comparative analysis of closely related genomes is expected to yield significant insights into the processes of evolution, development, and regulation. The recently sequenced genomes of twelve fruit fly (genus Drosophila ) species and other insects provide an ideal data set for this purpose. The primary focus of this research effort is on computational analysis of genome synteny (analysis of relative gene-order conservation between species), chromosomal dynamics, and genome rearrangement between species. We have developed computational methods to process draft genome assemblies and to infer cross-species synteny. Additionally, we have developed computationally efficient algorithms to infer evolutionary rearrangement event counts and ancestral synteny blocks with the ability to handle a large set of species with high gene counts. Finally, we analyzed chromosomal rearrangements due to large-scale events such as multi-gene inversions, and fine-scale events such as single-gene relocation. Our work provides new methodologies to enable fast comparative analysis of multi-species genome-scale datasets. Our results open a window into evolutionary chromosomal reorganization within a set of eukaryotic species and highlight the role of large-scale and fine-scale rearrangement events.