Thermoplasma acidophilum is a thermoacidophilic archaeon that thrives at 59 degrees C and pH 2, which was isolated from self-heating coal refuse piles and solfatara fields. Species of the genus Thermoplasma do not possess a rigid cell wall, but are only delimited by a plasma membrane. Many macromolecular assemblies from Thermoplasma, primarily proteases and chaperones, have been pivotal in elucidating the structure and function of their more complex eukaryotic homologues. Our interest in protein folding and degradation led us to seek a more complete representation of the proteins involved in these pathways by determining the genome sequence of the organism. Here we have sequenced the 1,564,905-base-pair genome in just 7,855 sequencing reactions by using a new strategy. The 1,509 open reading frames identify Thermoplasma as a typical euryarchaeon with a substantial complement of bacteria-related genes; however, evidence indicates that there has been much lateral gene transfer between Thermoplasma and Sulfolobus solfataricus, a phylogenetically distant crenarchaeon inhabiting the same environment. At least 252 open reading frames, including a complete protein degradation pathway and various transport proteins, resemble Sulfolobus proteins most closely.