Bacterial genomes are extremely dynamic and mosaic in nature. A substantial amount of genetic information is inserted into or deleted from such genomes through the process of horizontal transfer. Through the introduction of novel physiological traits from distantly related organisms, horizontal gene transfer often causes drastic changes in the ecological and pathogenic character of bacterial species and thereby promotes microbial diversification and speciation. This review discusses how the recent influx of complete chromosomal sequences of various microorganisms has allowed for a quantitative assessment of the scope, rate and impact of horizontally transmitted information on microbial evolution.