The Class III nucleotide cyclases are found in bacteria, eukaryotes and archaebacteria. Our survey of the bacterial and archaebacterial genome and plasmid sequences identified 193 Class III cyclase genes in only 29 species, of which we predict the majority to be adenylyl cyclases. Interestingly, several putative cyclase genes were found to have non-conserved substrate specifying residues. Ancestors of the eukaryotic C1-C2 domain containing soluble adenylyl cyclases as well as the protist guanylyl cyclases were found in bacteria. Diverse domains were fused to the cyclase domain and phylogenetic analysis indicated that most proteins within a single cluster have similar domain compositions, emphasising the ancient evolutionary origin and versatility of the cyclase domain.