Many insect species rely on intracellular bacterial symbionts for their viability and fecundity. Large-scale DNA-sequence analyses are revealing the forces that shape the evolution of these bacterial associates and the genetic basis of their specialization to an intracellular lifestyle. The full genome sequences of two obligate mutualists, Buchnera aphidicola of aphids and Wigglesworthia glossinidia of tsetse flies, reveal substantial gene loss and an integration of host and symbiont metabolic functions. Further genomic comparisons should reveal the generality of these features among bacterial mutualists and the extent to which they are shared with other intracellular bacteria, including obligate pathogens.