Abstract We stimulate the evolution of model protein sequences subject to mutations. A mutation is considered neutral if it conserves (1) the structure of the ground state, (2) its thermodynamic stability and (3) its kinetic accessibility. All other mutations are considered lethal and are rejected. We adopt a lattice model, amenable to a reliable solution of the protein folding problem. We prove the existence of extended neutral networks in sequence space—sequences can evolve until their similarity with the starting point is almost the same as for random sequences. Furthermore, we find that the rate of neutral mutations has a broad distribution in sequence space. Due to this fact, the substitution process is overdispersed (the ratio between variance and mean is larger than 1). This result is in contrast with the simplest model of neutral evolution, which assumes a Poisson process for substitutions, and in qualitative agreement with the biological data.