A characteristic feature of the domain archaea are the lipids forming the hydrophobic core of their cell membrane. These unique lipids are composed of isoprenoid side-chains stereospecifically ether linked to sn-glycerol-1-phosphate. Recently, considerable progress has been made in characterizing the enzymes responsible for the synthesis of archaeal lipids. However, little is known about their evolution. To better understand how this unique biosynthetic apparatus came to be, large-scale database surveys and phylogenetic analyses were performed. All characterized enzymes involved in the biosynthesis of isoprenoid side-chains and the glycerol phosphate backbone along with their assembly in ether lipids were included in these analyses. The sequence data available in public databases was complemented by an in-depth sampling of isoprenoid lipid biosynthesis genes from multiple genera of the archaeal order Halobacteriales, allowing us to look at the evolution of these enzymes on a smaller phylogenetic scale. This investigation of the isoprenoid biosynthesis apparatus of archaea on small and large phylogenetic scales reveals that it evolved through a combination of evolutionary processes, including the co-option of ancestral enzymes, modification of enzymatic specificity, orthologous and non-orthologous gene displacement, integration of components from eukaryotes and bacteria and lateral gene transfer within and between archaeal orders.