The midge, Belgica antarctica, is the only insect endemic to Antarctica, and thus it offers a powerful model for probing responses to extreme temperatures, freeze tolerance, dehydration, osmotic stress, ultraviolet radiation and other forms of environmental stress. Here we present the first genome assembly of an extremophile, the first dipteran in the family Chironomidae, and the first Antarctic eukaryote to be sequenced. At 99 megabases, B. antarctica has the smallest insect genome sequenced thus far. Although it has a similar number of genes as other Diptera, the midge genome has very low repeat density and a reduction in intron length. Environmental extremes appear to constrain genome architecture, not gene content. The few transposable elements present are mainly ancient, inactive retroelements. An abundance of genes associated with development, regulation of metabolism and responses to external stimuli may reflect adaptations for surviving in this harsh environment.