The gram-negative bacterium Helicobacter felis naturally colonizes the gastric mucosa of dogs and cats. Due to its ability to persistently infect laboratory mice, H. felis has been used extensively to experimentally model gastric disorders induced in humans by H. pylori. We determined the 1.67 Mb genome sequence of H. felis using combined Solexa and 454 pyrosequencing, annotated the genome, and compared it with multiple previously published Helicobacter genomes. About 1,063 (63.6%) of the 1,671 genes identified in the H. felis genome have orthologues in H. pylori, its closest relative among the fully sequenced Helicobacter species. Many H. pylori virulence factors are shared by H. felis: these include the gamma-glutamyl transpeptidase GGT, the immunomodulator NapA, and the secreted enzymes collagenase and HtrA. Helicobacter felis lacks a Cag pathogenicity island and the vacuolating cytotoxin VacA but possesses a complete comB system conferring natural competence. Remarkable features of the H. felis genome include its paucity of transcriptional regulators and an extraordinary abundance of chemotaxis sensors and restriction/modification systems. Helicobacter felis possesses an episomally replicating 6.7-kb plasmid and harbors three chromosomal regions with deviating GC content. These putative horizontally acquired regions show homology and synteny with the recently isolated H. pylori plasmid pHPPC4 and homology to Campylobacter bacteriophage genes (transposases, structural, and lytic genes), respectively. In summary, the H. felis genome harbors a variety of putative mobile elements that are unique among Helicobacter species and may contribute to this pathogen's carcinogenic properties.