Comparative genome analyses of close relatives have yielded exciting insight into the sources of microbial genome variability with respect to gene content, gene order and evolution of genes with unknown functions. The genomes of free-living bacteria often carry phages and repetitive sequences that mediate genomic rearrangements in contrast to the small genomes of obligate host-associated bacteria. This suggests that genomic stability correlates with the genomic content of repeated sequences and movable genetic elements, and thereby with bacterial lifestyle. Genes with unknown functions present in a single species tend to be shorter than conserved, functional genes, indicating that the fraction of unique genes in microbial genomes has been overestimated.