Diatoms are photosynthetic unicellular eukaryotes found in most aquatic environments. They are major players in global biogeochemical cycles, and generate as much oxygen through photosynthesis as terrestrial rainforests do. Insights into their evolutionary origins have been revealed by the whole-genome sequencing of Thalassiosira pseudonana and Phaeodactylum tricornutum. We now know that diatoms contain unusual assortments of genes derived from different sources, including those acquired by horizontal gene transfer from bacteria. These genes confer novel metabolic and signaling capacities that may underlie the extraordinary ecological success of diatoms on Earth today. The availability of a suite of techniques that can be used to monitor and manipulate diatom genes is enhancing our knowledge of their novel characteristics. We highlight these recent developments and illustrate how they are being used to understand different aspects of diatom biology. We also discuss the use of diatoms in commercial applications, such as for nanotechnology and biofuel production.