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Abstract Background Pneumonia and myocarditis are the most commonly reported diseases due to Histophilus somni, an opportunistic pathogen of the reproductive and respiratory tracts of cattle. Thus far only a few genes involved in metabolic and virulence functions have been identified and characterized in H. somni using traditional methods. Analyses of the genome sequences of several Pasteurellaceae species have provided insights into their biology and evolution. In view of the economic and ecological importance of H. somni, the genome sequence of pneumonia strain 2336 has been determined and compared to that of commensal strain 129Pt and other members of the Pasteurellaceae. Results The chromosome of strain 2336 (2,263,857 bp) contained 1,980 protein coding genes, whereas the chromosome of strain 129Pt (2,007,700 bp) contained only 1,792 protein coding genes. Although the chromosomes of the two strains differ in size, their average GC content, gene density (total number of genes predicted on the chromosome), and percentage of sequence (number of genes) that encodes proteins were similar. The chromosomes of these strains also contained a number of discrete prophage regions and genomic islands. One of the genomic islands in strain 2336 contained genes putatively involved in copper, zinc, and tetracycline resistance. Using the genome sequence data and comparative analyses with other members of the Pasteurellaceae, several H. somni genes that may encode proteins involved in virulence (e.g., filamentous haemaggutinins, adhesins, and polysaccharide biosynthesis/modification enzymes) were identified. The two strains contained a total of 17 ORFs that encode putative glycosyltransferases and some of these ORFs had characteristic simple sequence repeats within them. Most of the genes/loci common to both the strains were located in different regions of the two chromosomes and occurred in opposite orientations, indicating genome rearrangement since their divergence from a common ancestor. Conclusions Since the genome of strain 129Pt was ~256,000 bp smaller than that of strain 2336, these genomes provide yet another paradigm for studying evolutionary gene loss and/or gain in regard to virulence repertoire and pathogenic ability. Analyses of the complete genome sequences revealed that bacteriophage- and transposon-mediated horizontal gene transfer had occurred at several loci in the chromosomes of strains 2336 and 129Pt. It appears that these mobile genetic elements have played a major role in creating genomic diversity and phenotypic variability among the two H. somni strains.