Infection by Mycoplasma bovis (M. bovis) can induce diseases, such as pneumonia and otitis media in young calves and mastitis and arthritis in older animals. Here, we report the finished and annotated genome sequence of M. bovis strain Hubei-1, a strain isolated in 2008 that caused calf pneumonia on a Chinese farm. The genome of M. bovis strain Hubei-1 contains a single circular chromosome of 953,114 bp with a 29.37% GC content. We identified 803 open reading frames (ORFs) that occupy 89.5% of the genome. While 34 ORFs were Hubei-1 specific, 662 ORFs had orthologs in the M. bovis type strain PG45 genome. Genome analysis validated lateral gene transfer between M. bovis and the Mycoplasma mycoides subspecies mycoides, while phylogenetic analysis found that the closest M. bovis neighbor is Mycoplasma agalactiae. Glycerol may be the main carbon and energy source of M. bovis, and most of the biosynthesis pathways were incomplete. We report that 47 lipoproteins, 12 extracellular proteins and 18 transmembrane proteins are phase-variable and may help M. bovis escape the immune response. Besides lipoproteins and phase-variable proteins, genomic analysis found two possible pathogenicity islands, which consist of four genes and 11 genes each, and several other virulence factors including hemolysin, lipoate protein ligase, dihydrolipoamide dehydrogenase, extracellular cysteine protease and 5'-nucleotidase.