Genetic studies indicate that modern life descended from a common ancestor. The last universal common ancestor likely existed more than three billion years ago. Over the course of evolution, it appears that two main lines of descent, drawn as branches on a tree of life, have sprung from the last universal common ancestor: Bacteria and Archaea. A third group—the Eukarya—evolved from within the Archaea.
Biologists have sequenced the genomes of many living organisms, and these genomes allow us to reconstruct the details of evolutionary history.
These studies clarify that there are two fundamental divisions of life: Bacteria and Archaea. Another major group evolved from within the Archaea: the Eukarya, which includes all plants, animals, and fungi.
All of the organisms except for the Eukarya are considered prokaryotes. Prokaryotes are organisms that lack nuclei. That is, they don't have a membrane surrounding their genetic material. Prokaryotes are also all unicellular. In contrast, eukaryotes have nuclei in their cells, along with other membranous organelles. Some eukaryotes are unicellular and others are multicellular. When biologists speak of three major domains of life, they usually mean Bacteria, prokaryotic Archaea, and Eukarya. And when most biologists talk about "archaea," typically they are referring to just the prokaryotic Archaea. But keep in mind that eukaryotes are actually a specialized group of Archaea that developed some important new features, including nuclei.
Some of the new features in Eukarya arose from endosymbiotic events. In one endosymbiotic event, an ancestral eukaryotic cell engulfed a proteobacterium, which gave rise to mitochondria. A later endosymbiotic event with a cyanobacterium gave rise to chloroplasts. Most eukaryote genes are more closely related to those of specific groups of prokaryotic archaea, whereas other genes (especially genes related to mitochondria and chloroplasts) are most closely related to those of bacteria. Therefore, overlaid on the diverging lineages in the tree of life, there are some merging lineages.
In the past few years, scientists have sequenced the entire genomes of many different species from the Bacteria, prokaryotic Archaea, and Eukarya. This plethora of data has allowed scientists to compare how thousands of genes differ or are similar among organisms from these three groups.
Many of the comparisons corroborate the model of evolution that biologists currently hold: that Archaea diverged from the Bacteria long ago and that the Eukarya later evolved from within the Archaea.
Two major endosymbiotic events between the Archaea and the Bacteria resulted in eukaryotic cells having mitochondria and chloroplasts. In addition to these two large tangles in the branches between Archaea and Bacteria, there are many more smaller tangles that show a phenomenon called lateral gene transfer. For example, Archaean species have genes that have been recently derived from Bacteria, and Eukarya also have a number of genes that are of relatively recent Bacterial origin. This DNA sequence data has provided the evidence that lateral gene transfer occurred repeatedly throughout evolution.
For scientists, the lateral transfer of genes has turned lines of descent in the tree of life into a vast and complex network of relationships. Yet it is debatable whether lateral gene transfer has seriously complicated attempts to resolve the tree of prokaryotic life. While it complicates studies in some individual species, it need not present problems at higher levels. Nucleotide sequence comparisons involving entire genomes are revealing a stable core of crucial genes that are uncomplicated by lateral gene transfer. Gene trees based on this stable core more accurately reveal relationships of the organismal phylogeny.