Since the discovery of the two ancient "kingdoms" of Bacteria and Archaea, molecular biologists have been constantly revising their perception of the abundance and variety of microbial life, and the processes driving their evolution. In the last years, genome sequences from closely related species and strains of the same species have revealed a yet unforeseen diversity of gene repertoires, much larger than could have been predicted by their morphologies or biochemical capabilities. The origins and the functional significance of these differences still need to be understood, and the techniques to address these questions have yet by large to be invented. In this chapter, we will present a review of the current knowledge on the mechanisms responsible for the diversity of gene repertoires in prokaryotes.