Tardigrades, also known as water bears, are small aquatic animals. Some tardigrade species tolerate almost complete dehydration and exhibit extraordinary tolerance to various physical extremes in the dehydrated state. Here we determine a high-quality genome sequence of Ramazzottius varieornatus, one of the most stress-tolerant tardigrade species. Precise gene repertoire analyses reveal the presence of a small proportion (1.2% or less) of putative foreign genes, loss of gene pathways that promote stress damage, expansion of gene families related to ameliorating damage, and evolution and high expression of novel tardigrade-unique proteins. Minor changes in the gene expression profiles during dehydration and rehydration suggest constitutive expression of tolerance-related genes. Using human cultured cells, we demonstrate that a tardigrade-unique DNA-associating protein suppresses X-ray-induced DNA damage by ∼40% and improves radiotolerance. These findings indicate the relevance of tardigrade-unique proteins to tolerability and tardigrades could be a bountiful source of new protection genes and mechanisms.