The Chlamydomonas genome has been sequenced, assembled, and annotated to produce a rich resource for genetics and molecular biology in this well-studied model organism. However, the current reference genome contains ∼1000 blocks of unknown sequence (‘N-islands’), which are frequently placed in introns of annotated gene models. We developed a strategy to search for previously unknown exons hidden within such blocks, and determine the sequence, and exon/intron boundaries, of such exons. These methods are based on assembly and alignment of short cDNA and genomic DNA reads, completely independent of prior reference assembly or annotation. Our evidence indicates that a substantial proportion of the annotated intronic N-islands contain hidden exons. For most of these, our algorithm recovers full exonic sequence with associated splice junctions and exon-adjacent intronic sequence. These new exons represent de novo sequence generally present nowhere in the assembled genome, and the added sequence improves evolutionary conservation of the predicted encoded peptides.