We sequenced the genome of Theileria orientalis, a tick-borne apicomplexan protozoan parasite of cattle. The focus of this study was a comparative genome analysis of T. orientalis relative to other highly pathogenic Theileria species, T. parva and T. annulata. T. parva and T. annulata induce transformation of infected cells of lymphocyte or macrophage/monocyte lineages; in contrast, T. orientalis does not induce uncontrolled proliferation of infected leukocytes and multiplies predominantly within infected erythrocytes. While synteny across homologous chromosomes of the three Theileria species was found to be well conserved overall, subtelomeric structures were found to differ substantially, as T. orientalis lacks the large tandemly arrayed subtelomere-encoded variable secreted protein-encoding gene family. Moreover, expansion of particular gene families by gene duplication was found in the genomes of the two transforming Theileria species, most notably, the TashAT/TpHN and Tar/Tpr gene families. Gene families that are present only in T. parva and T. annulata and not in T. orientalis, Babesia bovis, or Plasmodium were also identified. Identification of differences between the genome sequences of Theileria species with different abilities to transform and immortalize bovine leukocytes will provide insight into proteins and mechanisms that have evolved to induce and regulate this process. The T. orientalis genome database is available at http://totdb.czc.hokudai.ac.jp/.