Pseudogenes are remnants of gene duplication (nonprocessed pseudogenes) and retrotransposition (processed pseudogenes) events. This study describes methods for identifying gene conversion candidates from predicted pseudogenes. Pseudogenes may accumulate and harbor sequence variations over time that become disease-causing mutations when transferred to genes by gene conversion. A total of 14,476 pseudogenes were identified, including 3,426 nonprocessed pseudogenes. In addition, 1,945 nonprocessed pseudogenes that are localized near their progenitor gene were evaluated for their possible role in gene conversion and disease. All 11 known, human cases of gene conversion (with deleterious effects) involving pseudogenes were successfully identified by these methods. Among the pseudogenes identified is a retinitis pigmentosa 9 (RP9) pseudogene that carries a c.509A>G mutation which produces a p.Asp170Gly substitution that is associated with the RP9 form of autosomal dominant retinitis pigmentosa (adRP). The c.509A>G mutation in RP9 is a previously unrecognized example of gene conversion between the progenitor gene and its pseudogene. Notably, two processed pseudogenes also contain mutations associated with diseases. An inosine monophosphate dehydrogenase 1 (IMPDH1) pseudogene carries a c.676G>A mutation that produces a p.Asp226Asn substitution that causes the retinitis pigmentosa 10 (RP10) form of adRP; and a phosphoglycerate kinase 1 (PGK1) pseudogene (PGK1P1) carries a c.837T>C mutation that produces a p.Ile252Thr substitution that is associated with a phosphoglycerate kinase deficiency. Ranking of nonprocessed pseudogenes as candidates for gene conversion was also performed based on the sequence characteristics of published cases of pseudogene-mediated gene conversion. All results and tools produced by this study are available for download at: http://genome.uiowa.edu/pseudogenes.