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To identify genetic changes underlying dog domestication and reconstruct their early evolutionary history, we analyzed novel high-quality genome sequences of three gray wolves, one from each of three putative centers of dog domestication, two ancient dog lineages (Basenji and Dingo) and a golden jackal as an outgroup. We find dogs and wolves diverged through a dynamic process involving population bottlenecks in both lineages and post-divergence gene flow, which confounds previous inferences of dog origins. In dogs, the domestication bottleneck was severe involving a 17 to 49-fold reduction in population size, a much stronger bottleneck than estimated previously from less intensive sequencing efforts. A sharp bottleneck in wolves occurred soon after their divergence from dogs, implying that the pool of diversity from which dogs arose was far larger than represented by modern wolf populations. Conditional on mutation rate, we narrow the plausible range for the date of initial dog domestication to an interval from 11 to 16 thousand years ago. This period predates the rise of agriculture, implying that the earliest dogs arose alongside hunter-gathers rather than agriculturists. Regarding the geographic origin of dogs, we find that surprisingly, none of the extant wolf lineages from putative domestication centers are more closely related to dogs, and the sampled wolves instead form a sister monophyletic clade. This result, in combination with our finding of dog-wolf admixture during the process of domestication, suggests a re-evaluation of past hypotheses of dog origin is necessary. Finally, we also detect signatures of selection, including evidence for selection on genes implicated in morphology, metabolism, and neural development. Uniquely, we find support for selective sweeps at regulatory sites suggesting gene regulatory changes played a critical role in dog domestication., Comment: 24 pages, 5 figures. To download the Supporting Information file, use the following link: https://www.dropbox.com/s/2yoytspv1iods7s/Freedman_etal_SupportingInfo_arxiv.pdf