Nitrospira are barely studied and mostly uncultured nitrite-oxidizing bacteria, which are, according to molecular data, among the most diverse and widespread nitrifiers in natural ecosystems and biological wastewater treatment. Here, environmental genomics was used to reconstruct the complete genome of "Candidatus Nitrospira defluvii" from an activated sludge enrichment culture. On the basis of this first-deciphered Nitrospira genome and of experimental data, we show that Ca. N. defluvii differs dramatically from other known nitrite oxidizers in the key enzyme nitrite oxidoreductase (NXR), in the composition of the respiratory chain, and in the pathway used for autotrophic carbon fixation, suggesting multiple independent evolution of chemolithoautotrophic nitrite oxidation. Adaptations of Ca. N. defluvii to substrate-limited conditions include an unusual periplasmic NXR, which is constitutively expressed, and pathways for the transport, oxidation, and assimilation of simple organic compounds that allow a mixotrophic lifestyle. The reverse tricarboxylic acid cycle as the pathway for CO2 fixation and the lack of most classical defense mechanisms against oxidative stress suggest that Nitrospira evolved from microaerophilic or even anaerobic ancestors. Unexpectedly, comparative genomic analyses indicate functionally significant lateral gene-transfer events between the genus Nitrospira and anaerobic ammonium-oxidizing planctomycetes, which share highly similar forms of NXR and other proteins reflecting that two key processes of the nitrogen cycle are evolutionarily connected.