The genome of Dictyostelium discoideum is being sequenced by an international consortium and is scheduled for completion in the next few years. The sequence will accelerate research into a number of phenomena carried out by these versatile soil amoebae, providing insight into analogous processes that operate in a wide range of eukaryotes. These include the dynamic regulation of the cytoskeleton during chemotaxis, intercellular communication during multicellular development and the intracellular growth of bacterial pathogens. The current state of the genome project is summarized and the challenges of sequencing a genome with unusually low guanine and cytosine content and with a bimodal base composition distribution are discussed. The prospects for functional analyses at the genomic scale are also considered.