Horizontal gene transfer in metazoans is generally regarded as a rare phenomenon, unless the donor species are closely associated with the recipient by virtue of endosymbiosis or parasitism. Contrary to this expectation, we find that bdelloid rotifers, microscopic invertebrates for which males and meiosis are unknown, harbor numerous genes of foreign origin, concentrated mainly in telomeric regions and accompanied by transposable elements (TEs) of diverse types, both intact and decayed. Within these regions, approximately one-third of the genes that are known in other taxa appear to be of non-metazoan origin and to have come from bacteria, fungi and plants. While some are defective, others, including genes of bacterial origin, are intact and transcribed, contain functional spliceosomal introns, and express active enzymes when introduced into E. coli. In contrast to telomeric regions, bdelloid proximal gene-rich regions are similar to those of model invertebrates in lacking foreign genes, but unlike them are depleted in mobile elements. It is possible that the highly unusual bdelloid lifestyle, characterized by repeated episodes of desiccation and recovery, which are likely accompanied by DNA breakage and repair and disruption of membrane integrity, facilitates uptake and ectopic incorporation of foreign genes, and that the capture and functional assimilation of exogenous genes may represent an important force shaping bdelloid genomes. DNA breakage and repair associated with desiccation and rehydration may also provide a non-meiotic route for the elimination of TEs by double-strand break repair via ectopic recombination between repeated elements, causing deleterious translocations and deletions and imposing synergistic selection against TEs. The possibility of a desiccation-induced parasexual process involving homologous incorporation of conspecific DNA remains to be investigated.