Erysipelothrix rhusiopathiae is a Gram-positive bacterium that represents a new class, Erysipelotrichia, in the phylum Firmicutes. The organism is a facultative intracellular pathogen that causes swine erysipelas, as well as a variety of diseases in many animals. Here, we report the first complete genome sequence analysis of a member of the class Erysipelotrichia. The E. rhusiopathiae genome (1,787,941 bp) is one of the smallest genomes in the phylum Firmicutes. Phylogenetic analyses based on the 16S rRNA gene and 31 universal protein families suggest that E. rhusiopathiae is phylogenetically close to Mollicutes, which comprises Mycoplasma species. Genome analyses show that the overall features of the E. rhusiopathiae genome are similar to those of other Gram-positive bacteria; it possesses a complete set of peptidoglycan biosynthesis genes, two-component regulatory systems, and various cell wall-associated virulence factors, including a capsule and adhesins. However, it lacks many orthologous genes for the biosynthesis of wall teichoic acids (WTA) and lipoteichoic acids (LTA) and the dltABCD operon, which is responsible for d-alanine incorporation into WTA and LTA, suggesting that the organism has an atypical cell wall. In addition, like Mollicutes, its genome shows a complete loss of fatty acid biosynthesis pathways and lacks the genes for the biosynthesis of many amino acids, cofactors, and vitamins, indicating reductive genome evolution. The genome encodes nine antioxidant factors and nine phospholipases, which facilitate intracellular survival in phagocytes. Thus, the E. rhusiopathiae genome represents evolutionary traits of both Firmicutes and Mollicutes and provides new insights into its evolutionary adaptations for intracellular survival.