Complete genome DNA sequence and analysis is presented for Wolbachia, the obligate alpha-proteobacterial endosymbiont required for fertility and survival of the human filarial parasitic nematode Brugia malayi. Although, quantitatively, the genome is even more degraded than those of closely related Rickettsia species, Wolbachia has retained more intact metabolic pathways. The ability to provide riboflavin, flavin adenine dinucleotide, heme, and nucleotides is likely to be Wolbachia's principal contribution to the mutualistic relationship, whereas the host nematode likely supplies amino acids required for Wolbachia growth. Genome comparison of the Wolbachia endosymbiont of B. malayi (wBm) with the Wolbachia endosymbiont of Drosophila melanogaster (wMel) shows that they share similar metabolic trends, although their genomes show a high degree of genome shuffling. In contrast to wMel, wBm contains no prophage and has a reduced level of repeated DNA. Both Wolbachia have lost a considerable number of membrane biogenesis genes that apparently make them unable to synthesize lipid A, the usual component of proteobacterial membranes. However, differences in their peptidoglycan structures may reflect the mutualistic lifestyle of wBm in contrast to the parasitic lifestyle of wMel. The smaller genome size of wBm, relative to wMel, may reflect the loss of genes required for infecting host cells and avoiding host defense systems. Analysis of this first sequenced endosymbiont genome from a filarial nematode provides insight into endosymbiont evolution and additionally provides new potential targets for elimination of cutaneous and lymphatic human filarial disease.