We determined the sequence of about half (7,470 nt) of the mitochondrial genome of the sipunculid Phascolopsis gouldii, the first representative of this phylum to be so studied. All of the 19 identified genes are transcribed from the same DNA strand. The arrangement of these genes is remarkably similar to that of the oligochaete annelid Lumbricus terrestris. Comparison of both the inferred amino acid sequences and the gene arrangements of a variety of diverse metazoan taxa reveals that the phylum Sipuncula is more closely related to Annelida than to Mollusca. This requires reinterpretation of the homology of several embryological features and of patterns of animal body plan evolution.