Brucella species include important zoonotic pathogens that have a substantial impact on both agriculture and human health throughout the world. Brucellae are thought of as "stealth pathogens" that escape recognition by the host innate immune response, modulate the acquired immune response, and evade intracellular destruction. We analyzed the genome sequences of members of the family Brucellaceae to assess its evolutionary history from likely free-living soil-based progenitors into highly successful intracellular pathogens. Phylogenetic analysis split the genus into two groups: recently identified and early-dividing "atypical" strains and a highly conserved "classical" core clade containing the major pathogenic species. Lateral gene transfer events brought unique genomic regions into Brucella that differentiated them from Ochrobactrum and allowed the stepwise acquisition of virulence factors that include a type IV secretion system, a perosamine-based O antigen, and systems for sequestering metal ions that are absent in progenitors. Subsequent radiation within the core Brucella resulted in lineages that appear to have evolved within their preferred mammalian hosts, restricting their virulence to become stealth pathogens capable of causing long-term chronic infections.