Since the completion of the Caenorhabditis elegans genome sequence 10 years ago, efforts of the large community of C. elegans geneticists have resulted in a high-quality annotation of the structures and sequence relatedness of nearly all the protein encoding and RNA genes. Based on increasingly accurate gene counts in other species, it now appears that C. elegans has more functional genes than most insects and approximately the same number as most mammals. In the last few years, draft genome sequences for several other nematodes have been published (C. briggsae and Brugia malayi) or publicly released (C. remanei, C. brenneri, C. japonica, Pristionchus pacificus, Trichinella spiralis and Haemonchus contortus). Comparisons of gene content within the phylum and to other phyla reveal complex patterns of genome evolution. These patterns include substantial numbers of genes conserved across all the major metazoan phyla (core metazoan genes) and many nematode-specific genes and gene families. Nematode-specific genes are located predominantly on autosomal arms, which also have higher recombination rates. It appears that evolutionary innovations occur mostly in these regions, probably facilitated by higher recombination. Few of these genes have gross phenotypes when knocked down by RNAi, suggesting that many of them function in specific aspects of nematode biology that were not tested, including chemosensation, pathogen response and xenobiotic detoxification.