Species phylogenies derived from comparisons of single genes are rarely consistent with each other, due to horizontal gene transfer, unrecognized paralogy and highly variable rates of evolution. The advent of completely sequenced genomes allows the construction of a phylogeny that is less sensitive to such inconsistencies and more representative of whole-genomes than are single-gene trees. Here, we present a distance-based phylogeny constructed on the basis of gene content, rather than on sequence identity, of 13 completely sequenced genomes of unicellular species. The similarity between two species is defined as the number of genes that they have in common divided by their total number of genes. In this type of phylogenetic analysis, evolutionary distance can be interpreted in terms of evolutionary events such as the acquisition and loss of genes, whereas the underlying properties (the gene content) can be interpreted in terms of function. As such, it takes a position intermediate to phylogenies based on single genes and phylogenies based on phenotypic characteristics. Although our comprehensive genome phylogeny is independent of phylogenies based on the level of sequence identity of individual genes, it correlates with the standard reference of prokarytic phylogeny based on sequence similarity of 16s rRNA. Thus, shared gene content between genomes is quantitatively determined by phylogeny, rather than by phenotype, and horizontal gene transfer has only a limited role in determining the gene content of genomes.