A new archaeal phylum, Lokiarchaeota, has been discovered, which forms a monophyletic group with eukaryotes in phylogenomic analyses. The Lokiarchaeota genome encodes an expanded repertoire of eukaryotic signature proteins, suggesting sophisticated membrane remodeling capabilities. These findings support the hypothesis that the eukaryotic host evolved from a bona fide archaeon, providing a genomic 'starter-kit' for the increased cellular and genomic complexity of eukaryotes. Lokiarchaeota is a novel archaeal lineage related to the TACK superphylum, representing the nearest relative of eukaryotes in phylogenomic analyses. Its genome encodes many eukaryote-specific features, offering unique insights into the emergence of cellular complexity in eukaryotes. The Lokiarchaeum genome contains several actin homologues with higher similarity to eukaryotic actins and actin-related proteins than to crenactins. It also encodes a large number of Ras-superfamily GTPases, which are essential for various regulatory processes in eukaryotes. The Lokiarchaeum genome also contains a primordial ESCRT complex, which is essential for the multivesicular endosome pathway in eukaryotes. The Lokiarchaeum genome contains a gene cluster that encodes several components required for a functional ubiquitin modifier system. The Lokiarchaeum genome appears to contain a 'eukaryotic-like' ribosome, including a putative homologue of eukaryotic ribosomal protein L22e. These findings suggest that the archaeal ancestor of eukaryotes was more complex than previously inferred. The discovery of Lokiarchaeota indicates that the gap between prokaryotes and eukaryotes might be due to poor sampling of existing archaeal diversity. Environmental surveys have revealed the existence of many uncultivated archaeal lineages, some of which may be closer relatives of eukaryotes. The genomic exploration of these lineages has now become feasible, and such studies will provide further insights into the identity and nature of the archaeal ancestor of eukaryotes.A new archaeal phylum, Lokiarchaeota, has been discovered, which forms a monophyletic group with eukaryotes in phylogenomic analyses. The Lokiarchaeota genome encodes an expanded repertoire of eukaryotic signature proteins, suggesting sophisticated membrane remodeling capabilities. These findings support the hypothesis that the eukaryotic host evolved from a bona fide archaeon, providing a genomic 'starter-kit' for the increased cellular and genomic complexity of eukaryotes. Lokiarchaeota is a novel archaeal lineage related to the TACK superphylum, representing the nearest relative of eukaryotes in phylogenomic analyses. Its genome encodes many eukaryote-specific features, offering unique insights into the emergence of cellular complexity in eukaryotes. The Lokiarchaeum genome contains several actin homologues with higher similarity to eukaryotic actins and actin-related proteins than to crenactins. It also encodes a large number of Ras-superfamily GTPases, which are essential for various regulatory processes in eukaryotes. The Lokiarchaeum genome also contains a primordial ESCRT complex, which is essential for the multivesicular endosome pathway in eukaryotes. The Lokiarchaeum genome contains a gene cluster that encodes several components required for a functional ubiquitin modifier system. The Lokiarchaeum genome appears to contain a 'eukaryotic-like' ribosome, including a putative homologue of eukaryotic ribosomal protein L22e. These findings suggest that the archaeal ancestor of eukaryotes was more complex than previously inferred. The discovery of Lokiarchaeota indicates that the gap between prokaryotes and eukaryotes might be due to poor sampling of existing archaeal diversity. Environmental surveys have revealed the existence of many uncultivated archaeal lineages, some of which may be closer relatives of eukaryotes. The genomic exploration of these lineages has now become feasible, and such studies will provide further insights into the identity and nature of the archaeal ancestor of eukaryotes.