The Gram-negative bacterium Yersinia pestis is the causative agent of the systemic invasive infectious disease classically referred to as plague, and has been responsible for three human pandemics: the Justinian plague (sixth to eighth centuries), the Black Death (fourteenth to nineteenth centuries) and modern plague (nineteenth century to the present day). The recent identification of strains resistant to multiple drugs and the potential use of Y. pestis as an agent of biological warfare mean that plague still poses a threat to human health. Here we report the complete genome sequence of Y. pestis strain CO92, consisting of a 4.65-megabase (Mb) chromosome and three plasmids of 96.2 kilobases (kb), 70.3kb and 9.6kb. The genome is unusually rich in insertion sequences and displays anomalies in GC base-composition bias, indicating frequent intragenomic recombination. Many genes seem to have been acquired from other bacteria and viruses (including adhesins, secretion systems and insecticidal toxins). The genome contains around 150 pseudogenes, many of which are remnants of a redundant enteropathogenic lifestyle. The evidence of ongoing genome fluidity, expansion and decay suggests Y. pestis is a pathogen that has undergone large-scale genetic flux and provides a unique insight into the ways in which new and highly virulent pathogens evolve.