The variable lymphocyte receptors (VLRs) of jawless vertebrates such as lamprey and hagfish are composed of highly diverse modular leucine-rich repeats. Each lymphocyte assembles a unique VLR by rearrangement of the germline gene. In the lamprey genome, we identify here about 850 distinct cassettes encoding leucine-rich repeat modules that serve as sequence templates for the hypervariable VLR repertoires. The data indicate a gene conversion-like process in VLR diversification. Genomic analysis suggested a link between the VLR and platelet glycoprotein receptors. Lamprey lymphocytes express two putative deaminases of the AID-APOBEC family that may be involved in VLR diversification, as indicated by in vitro mutagenesis and recombination assays. Vertebrate acquired immunity could have therefore originated from lymphocyte receptor diversification by an ancestral AID-like DNA cytosine deaminase.