Rice fields are a global source of the greenhouse gas methane, which is produced by methanogenic archaea, and by methanogens of Rice Cluster I (RC-I) in particular. RC-I methanogens are not yet available in pure culture, and the mechanistic reasons for their prevalence in rice fields are unknown. We reconstructed a complete RC-I genome (3.18 megabases) using a metagenomic approach. Sequence analysis demonstrated an aerotolerant, H2/CO2-dependent lifestyle and enzymatic capacities for carbohydrate metabolism and assimilatory sulfate reduction, hitherto unknown among methanogens. These capacities and a unique set of antioxidant enzymes and DNA repair mechanisms as well as oxygen-insensitive enzymes provide RC-I with a selective advantage over other methanogens in its habitats, thereby explaining the prevalence of RC-I methanogens in the rice rhizosphere.