A nested gene is a gene whose entire coding sequence lies within the bounds (between the start codon and the stop codon) of a larger external gene. The coding sequence for a nested gene differs greatly from the coding sequence for its external host gene. Typically, nested genes and their host genes encode functionally unrelated proteins, and have different expression patterns in an organism.
There are two categories of nested genes: 
* genes nested within an intron of a larger gene
* genes which lie opposite the coding sequence of a larger gene