Eucalypts are the world's most widely planted hardwood trees. Their outstanding diversity, adaptability and growth have made them a global renewable resource of fibre and energy. We sequenced and assembled .94% of the 640-megabase genome of Eucalyptus grandis. Of 36,376 predicted protein-coding genes, 34% occur in tandem duplications, the largest proportion thus far in plant genomes. Eucalyptus also shows the highest diversity of genes for specialized metabolites such as terpenes that act as chemical defence and provide unique pharmaceutical oils. Genome sequencing of the E. grandis sister species E. globulus and a set of inbred E. grandis tree genomes reveals dynamic genome evolution and hotspots of inbreeding depression. The E. grandis genome is the first reference for the eudicot order Myrtales and is placed here sister to the eurosids. This resource expands our understanding of the unique biology of large woody perennials and provides a powerful tool to accelerate comparative biology, breeding and biotechnology.A major opportunity for a sustainable energy and biomaterials economy in many parts of the world lies in a better understanding of the molecular basis of superior growth and adaptation in woody plants. Part of this opportunity involves species of Eucalyptus L'Hér, a genus of woody perennials native to Australia 1 . The remarkable adaptability of eucalypts coupled with their fast growth and superior wood properties has driven their rapid adoption for plantation forestry in more than 100 countries across six continents (.20 million ha) 2 , making eucalypts the most widely planted hardwood forest trees in the world. The subtropical E. grandis and the temperate E. globulus stand out as targets of breeding programmes worldwide. Planted eucalypts provide key renewable resources for the production of pulp, paper, biomaterials and bioenergy, while mitigating human pressures on native forests 3 . Eucalypts also have a large diversity and high concentration of essential oils (mixtures of mono-and sesquiterpenes), many of which have ecological functions as well as medicinal and industrial uses. Predominantly outcrossers 1 with hermaphroditic animal-pollinated flowers, eucalypts are highly heterozygous and display pre-and postzygotic barriers to selfing to reduce inbreeding depression for fitness and survival 4 .To mitigate the challenge of assembling a highly heterozygous genome, we sequenced the genome of 'BRASUZ1', a 17-year-old E. grandis genotype derived from one generation of selfing. The availability of annotated forest tree genomes from two separately evolving rosid lineages, Eucalyptus (order Myrtales) and Populus (order Malpighiales 5 ), in combination with genomes from domesticated woody plants (for example, Vitis, Prunus, Citrus), provides a comparative foundation for addressing