BACKGROUND: A fundamental concept in biology is that heritable material, DNA, is passed from parent to offspring, a process called vertical gene transfer. An alternative mechanism of gene acquisition is through horizontal gene transfer (HGT), which involves movement of genetic material between different species. HGT is well-known in single-celled organisms such as bacteria, but its existence in higher organisms, including animals, is less well established, and is controversial in humans. RESULTS: We have taken advantage of the recent availability of a sufficient number of high-quality genomes and associated transcriptomes to carry out a detailed examination of HGT in 26 animal species (10 primates, 12 flies and four nematodes) and a simplified analysis in a further 14 vertebrates. Genome-wide comparative and phylogenetic analyses show that HGT in animals typically gives rise to tens or hundreds of active 'foreign' genes, largely concerned with metabolism. Our analyses suggest that while fruit flies and nematodes have continued to acquire foreign genes throughout their evolution, humans and other primates have gained relatively few since their common ancestor. We also resolve the controversy surrounding previous evidence of HGT in humans and provide at least 33 new examples of horizontally acquired genes. CONCLUSIONS: We argue that HGT has occurred, and continues to occur, on a previously unsuspected scale in metazoans and is likely to have contributed to biochemical diversification during animal evolution.