Rickettsia are best known as strictly intracellular vector-borne bacteria that cause mild to severe diseases in humans and other animals. Recent advances in molecular tools and biological experiments have unveiled a wide diversity of Rickettsia spp. that include species with a broad host range and some species that act as endosymbiotic associates. Molecular phylogenies of Rickettsia spp. contain some ambiguities, such as the position of R. canadensis and relationships within the spotted fever group. In the modern era of genomics, with an ever-increasing number of sequenced genomes, there is enhanced interest in the use of whole-genome sequences to understand pathogenesis and assess evolutionary relationships among rickettsial species. Rickettsia have small genomes (1.1–1.5 Mb) as a result of reductive evolution. These genomes contain split genes, gene remnants and pseudogenes that, owing to the colinearity of some rickettsial genomes, may represent different steps of the genome degradation process. Genomics reveal extreme genome reduction and massive gene loss in highly vertebrate-pathogenic Rickettsia compared to less virulent or endosymbiotic species. Information gleaned from rickettsial genomics challenges traditional concepts of pathogenesis that focused primarily on the acquisition of virulence factors. Another intriguing phenomenon about the reduced rickettsial genomes concerns the large fraction of non-coding DNA and possible functionality of these “non-coding” sequences, because of the high conservation of these regions. Despite genome streamlining, Rickettsia spp. contain gene families, selfish DNA, repeat palindromic elements and genes encoding eukaryotic-like motifs. These features participate in sequence and functional diversity and may play a crucial role in adaptation to the host cell and pathogenesis. Genome analyses have identified a large fraction of mobile genetic elements, including plasmids, suggesting the possibility of lateral gene transfer in these intracellular bacteria. Phylogenetic analyses have identified several candidates for horizontal gene acquisition among Rickettsia spp. including tra, pat2, and genes encoding for the type IV secretion system and ATP/ADP translocase that may have been acquired from bacteria living in amoebae. Gene loss, gene duplication, DNA repeats and lateral gene transfer all have shaped rickettsial genome evolution. A comprehensive analysis of the entire genome, including genes and non-coding DNA, will help to unlock the mysteries of rickettsial evolution and pathogenesis.