In order to enrich the phylogenetic diversity represented in the available sequenced bacterial genomes and as part of an "Assembling the Tree of Life" project, we determined the genome sequence of Thermomicrobium roseum DSM 5159. T. roseum DSM 5159 is a red-pigmented, rod-shaped, Gram-negative extreme thermophile isolated from a hot spring that possesses both an atypical cell wall composition and an unusual cell membrane that is composed entirely of long-chain 1,2-diols. Its genome is composed of two circular DNA elements, one of 2,006,217 bp (referred to as the chromosome) and one of 919,596 bp (referred to as the megaplasmid). Strikingly, though few standard housekeeping genes are found on the megaplasmid, it does encode a complete system for chemotaxis including both chemosensory components and an entire flagellar apparatus. This is the first known example of a complete flagellar system being encoded on a plasmid and suggests a straightforward means for lateral transfer of flagellum-based motility. Phylogenomic analyses support the recent rRNA-based analyses that led to T. roseum being removed from the phylum Thermomicrobia and assigned to the phylum Chloroflexi. Because T. roseum is a deep-branching member of this phylum, analysis of its genome provides insights into the evolution of the Chloroflexi. In addition, even though this species is not photosynthetic, analysis of the genome provides some insight into the origins of photosynthesis in the Chloroflexi. Metabolic pathway reconstructions and experimental studies revealed new aspects of the biology of this species. For example, we present evidence that T. roseum oxidizes CO aerobically, making it the first thermophile known to do so. In addition, we propose that glycosylation of its carotenoids plays a crucial role in the adaptation of the cell membrane to this bacterium's thermophilic lifestyle. Analyses of published metagenomic sequences from two hot springs similar to the one from which this strain was isolated, show that close relatives of T. roseum DSM 5159 are present but have some key differences from the strain sequenced.