Orthology is a widely used concept in comparative and evolutionary genomics. In addition to prokaryotic orthology, delineating eukaryotic orthology has provided insight into the evolution of higher organisms. Indeed, many eukaryotic ortholog databases have been established for this purpose. However, unlike prokaryotes, alternative splicing (AS) has hampered eukaryotic orthology assignments. Therefore, existing databases likely contain ambiguous eukaryotic ortholog relationships and possibly misclassify alternatively spliced protein isoforms as in-paralogs, which are duplicated genes that arise following speciation. Here, we propose a new approach for designating eukaryotic orthology using processed transcription units, and we present an orthology database prototype using the human and mouse genomes. Currently existing programs cover less than 69% of the human reference sequences when assigning human/mouse orthologs. In contrast, our method encompasses up to 80% of the human reference sequences. Moreover, the ortholog database presented herein is more than 92% consistent with the existing databases. In addition to managing AS, this approach is capable of identifying orthologs of embedded genes and fusion genes using syntenic evidence. In summary, this new approach is sensitive, specific and can generate a more comprehensive and accurate compilation of eukaryotic orthologs.