In this paper we develop a coalescent model with intralocus gene conversion. Such models are of increasing importance in the analysis of intralocus variability and linkage disequilibrium. We derive the distribution of the waiting time until a gene conversion event occurs in a sample in terms of the distribution of the length of the transferred segment, ζ. We do not assume any specific form of the distribution of ζ. Further, given that a gene conversion event occurs we find the distribution of (σ, τ), the end points of the transferred segment and derive results on correlations between local trees in positions X₁ and X₁. Among other results we show that the correlation between the branch lengths of two local trees in the coalescent with gene conversion (and no recombination) decreases toward a nonzero constant when the distance between X₁ and X₁ increases. Finally, we show that a model including both recombination and gene conversion might account for the lack of intralocus associations found in, e.g., Drosophila melanogaster. (C) 2000 Academic Press.