Microchromosomes are prevalent in nonmammalian vertebrates [P. D. Waters
et al.
,
Proc. Natl. Acad. Sci. U.S.A.
118
(2021)], but a few of them are missing in bird genome assemblies. Here, we present a new chicken reference genome containing all autosomes, a Z and a W chromosome, with all gaps closed except for the W. We identified ten small microchromosomes (termed dot chromosomes) with distinct sequence and epigenetic features, among which six were newly assembled. Those dot chromosomes exhibit extremely high GC content and a high level of DNA methylation and are enriched for housekeeping genes. The pericentromeric heterochromatin of dot chromosomes is disproportionately large and continues to expand with the proliferation of satellite DNA and testis-expressed genes. Our analyses revealed that the 41-bp CNM repeat frequently forms higher-order repeats (HORs) at the centromeres of acrocentric chromosomes. The centromere core regions where the kinetochore attaches often encompass telomeric sequence (TTAGGG)n, and in a one of the dot chromosomes, the centromere core recruits an endogenous retrovirus (ERV). We further demonstrate that the W chromosome shares some common features with dot chromosomes, having large arrays of hypermethylated tandem repeats. Finally, using the complete chicken chromosome models, we reconstructed a fine picture of chordate karyotype evolution, revealing frequent chromosomal fusions before and after vertebrate whole-genome duplications. Our sequence and epigenetic characterization of chicken chromosomes shed insights into the understanding of vertebrate genome evolution and chromosome biology.