Microbes of the phylum Aigarchaeota are widely distributed in geothermal environments, but their physiological and ecological roles are poorly understood. Here we analyze six Aigarchaeota metagenomic bins from two circumneutral hot springs in Tengchong, China, to reveal that they are either strict or facultative anaerobes, and most are chemolithotrophs that can perform sulfide oxidation. Applying comparative genomics to the Thaumarchaeota and Aigarchaeota, we find that they both originated from thermal habitats, sharing 1154 genes with their common ancestor. Horizontal gene transfer played a crucial role in shaping genetic diversity of Aigarchaeota and led to functional partitioning and ecological divergence among sympatric microbes, as several key functional innovations were endowed by Bacteria, including dissimilatory sulfite reduction and possibly carbon monoxide oxidation. Our study expands our knowledge of the possible ecological roles of the Aigarchaeota and clarifies their evolutionary relationship to their sister lineage Thaumarchaeota.