Alternative splicing plays an important role in processes such as development, differentiation and cancer. With the recent increase in the estimates of the number of human genes that undergo alternative splicing from 5 to 35-59%, it is becoming critical to develop a better understanding of its functional consequences and regulatory mechanisms. We conducted a large scale study of the distribution of protein domains in a curated data set of several thousand genes and identified protein domains disproportionately distributed among alternatively spliced genes. We also identified a number of protein domains that tend to be spliced out. Both the proteins having the disproportionately distributed domains as well as those with spliced-out domains are predominantly involved in the processes of cell communication, signaling, development and apoptosis. These proteins function mostly as enzymes, signal transducers and receptors. Somewhat surprisingly, 28% of all occurrences of spliced-out domains are not effected by straightforward exclusion of exons coding for the domains but by inclusion or exclusion of other exons to shift the reading frame while retaining the exons coding for the domains in the final transcripts.