Budding yeast Saccharomyces cerevisiae is the most extensively studied organism in functional genomics, but transcript structure has remained largely elusive for most of its 6,000 genes. To complement this least explored field, we sequenced cDNA libraries generated by using a vector‐capping method that allows accurate mapping of transcription start sites (TSSs). Consequently, we assigned 11,575 TSSs to 3,638 genes, demonstrating that most yeast genes have two or more TSSs. We also revealed alternative splicing events joining two adjacent genes. Furthermore, we isolated full‐length cDNAs of ∼1,800 novel transcripts including small transcripts derived from “intergenic” regions, antisense transcripts to known genes, and sense transcripts starting from inside the known genes. Extrapolation of these results suggests the presence of ∼10,000 transcription units in total. Thus, the yeast transcriptome is considerably more complex than previously thought and shares many recently uncovered characteristics with those of mammals. Pervasive transcription to generate a plethora of noncoding RNAs is not specific to higher eukaryotes but likely an intrinsic feature of the eukaryotic system. Accordingly, the yeast would provide a good model to study noncoding RNAs, which may represent the largest part missing from our current parts list.