Nitrite-oxidizing bacteria (NOB) catalyze the second step of nitrification, a major process of the biogeochemical nitrogen cycle, but the recognized diversity of this guild is surprisingly low and only two bacterial phyla contain known NOB. Here, we report on the discovery of a chemolithoautotrophic nitrite oxidizer that belongs to the widespread phylum Chloroflexi not previously known to contain any nitrifying organism. This organism, named Nitrolancetus hollandicus, was isolated from a nitrifying reactor. Its tolerance to a broad temperature range (25-63 °C) and low affinity for nitrite (K(s)=1 mM), a complex layered cell envelope that stains Gram positive, and uncommon membrane lipids composed of 1,2-diols distinguish N. hollandicus from all other known nitrite oxidizers. N. hollandicus grows on nitrite and CO(2), and is able to use formate as a source of energy and carbon. Genome sequencing and analysis of N. hollandicus revealed the presence of all genes required for CO(2) fixation by the Calvin cycle and a nitrite oxidoreductase (NXR) similar to the NXR forms of the proteobacterial nitrite oxidizers, Nitrobacter and Nitrococcus. Comparative genomic analysis of the nxr loci unexpectedly indicated functionally important lateral gene transfer events between Nitrolancetus and other NOB carrying a cytoplasmic NXR, suggesting that horizontal transfer of the NXR module was a major driver for the spread of the capability to gain energy from nitrite oxidation during bacterial evolution. The surprising discovery of N. hollandicus significantly extends the known diversity of nitrifying organisms and likely will have implications for future research on nitrification in natural and engineered ecosystems.