Genomes hold within them the record of the evolution of life on Earth. But genome fusions and horizontal gene transfer seem to have obscured sufficiently the gene sequence record such that it is difficult to reconstruct the phylogenetic tree of life. Here we determine the general outline of the tree using complete genome data from representative prokaryotes and eukaryotes and a new genome analysis method that makes it possible to reconstruct ancient genome fusions and phylogenetic trees. Our analyses indicate that the eukaryotic genome resulted from a fusion of two diverse prokaryotic genomes, and therefore at the deepest levels linking prokaryotes and eukaryotes, the tree of life is actually a ring of life. One fusion partner branches from deep within an ancient photosynthetic clade, and the other is related to the archaeal prokaryotes. The eubacterial organism is either a proteobacterium, or a member of a larger photosynthetic clade that includes the Cyanobacteria and the Proteobacteria.