Instead of the immunoglobulin-type antigen receptors of jawed vertebrates, jawless fish have variable lymphocyte receptors (VLRs), which consist of leucine-rich repeat (LRR) modules. Somatic diversification of the VLR gene is shown here to occur through a multistep assembly of LRR modules randomly selected from a large bank of flanking cassettes. The predicted concave surface of the VLR is lined with hypervariable positively selected residues, and computational analysis suggests a repertoire of about 1014 unique receptors. Lamprey immunized with anthrax spores responded with the production of soluble antigen-specific VLRs. These findings reveal that two strikingly different modes of antigen recognition through rearranged lymphocyte receptors have evolved in the jawless and jawed vertebrates.