Sea anemones are seemingly primitive animals that, along with corals, jellyfish, and hydras, constitute the Cnidaria, the oldest eumetazoan phylum. Here we report a comparative analysis of the draft genome of an emerging cnidarian model, the starlet anemone Nematostella vectensis. The anemone genome is surprisingly complex, with a gene repertoire, exon-intron structure, and large-scale gene linkage more similar to vertebrates than to flies or nematodes. These results imply that the genome of the eumetazoan ancestor was similarly complex, and that fly and nematode genomes have been modified via sequence divergence, gene and intron loss, and genomic rearrangement. Nearly one-fifth of the genes of the ancestor are eumetazoan novelties in the sense that they have no recognizable homologs outside of animals, or contain new protein domains and/or domain combinations that are not found in other eukaryotes. These eumetazoanspecific genes are enriched for animal functions like cell signaling, adhesion, and synaptic transmission, and analysis of diverse pathways suggests that these gene "inventions" along the lineage leading to animals were already likely well integrated with pre-existing eukaryotic genes in the eumetazoan progenitor. Subsequent diversification in the cnidarian and bilaterian lineages was therefore associated with new regulatory linkages and higher-level integration of these preexisting pathways and networks.