The genome of the eukaryotic protist Giardia lamblia, an important human intestinal parasite, is compact in structure and content, contains few introns or mitochondrial relics, and has simplified machinery for DNA replication, transcription, RNA processing, and most metabolic pathways. Protein kinases comprise the single largest protein class and reflect Giardia's requirement for a complex signal transduction network for coordinating differentiation. Lateral gene transfer from bacterial and archaeal donors has shaped Giardia's genome, and previously unknown gene families, for example, cysteine-rich structural proteins, have been discovered. Unexpectedly, the genome shows little evidence of heterozygosity, supporting recent speculations that this organism is sexual. This genome sequence will not only be valuable for investigating the evolution of eukaryotes, but will also be applied to the search for new therapeutics for this parasite.