The mammalian Dlx3 and Dlx4 genes are configured as a bigene cluster, and their respective expression patterns are controlled temporally and spatially by cis-elements that largely reside within the intergenic region of the cluster. Previous work revealed that there are conspicuously conserved elements within the intergenic region of the Dlx34 bigene clusters of mouse and human. In this paper we have extended these analyses to include 12 additional mammalian taxa (including a marsupial and a monotreme) in order to better define the nature and molecular evolutionary trends of the coding and non-coding functional elements among morphologically divergent mammals. Dlx34 regions were fully sequenced from 12 divergent taxa of interest. We identified three theria-specific amino acid replacements in homeodomain of Dlx4 gene that functions in placenta. Sequence analyses of constrained nucleotide sites in the intergenic non-coding region showed that many of the intergenic conserved elements are highly conserved and have evolved slowly within the mammals. In contrast, a branchial arch/craniofacial enhancer I37-2 exhibited accelerated evolution at the branch between the monotreme and therian common ancestor despite being highly conserved among therian species. Functional analysis of I37-2 in transgenic mice has shown that the equivalent region of the platypus fails to drive transcriptional activity in branchial arches. These observations, taken together with our molecular evolutionary data, suggest that theria-specific episodic changes in the I37-2 element may have contributed to craniofacial innovation at the base of the mammalian lineage. J. Exp. Zool. (Mol. Dev. Evol.) 9999B:639650, 2012. (c) 2012 Wiley Periodicals, Inc.