Although the capacity of cells to respond to environmental challenges such as oxidative damage are ancient evolutionary developments that have been carried through to modern higher vertebrates as “innate” immunity, the characteristic immune response of vertebrates is a relatively recent evolutionary development that is present only in jawed vertebrates. The vertebrate “combinatorial” response is defined by the presence of lymphocytes as specific antigen recognition cells and by the complete panel of antibodies, T cell receptors, and major histocompatibility complex molecules all of which are members of the immunoglobulin family. Its emergence in evolution was an extremely rapid event (approximately 10 million years) that was catalyzed by the horizontal transfer of recombinase activator genes (RAG) from microbes to an ancestral jawed vertebrate. RAGs occur in jawed vertebrates, but have not been found in invertebrates and other intermediate species. We propose that antigen recognition capacity contributed by this novel combinatorial mechanism gave jawed vertebrates the ability to recognize the entire range of potential antigenic molecular structures, including self components and molecules of infectious microbes not shared with vertebrates. The contrast within the vertebrates is striking because the most ancient extant jawed vertebrates, sharks and their kin, have the complete panoply of T-cell receptors, antibodies, MHC products and RAG genes, whereas agnathans possess cells resembling lymphocytes but ostensibly lack all of the molecules definitive of combinatorial immunity. Another vertebrate innovation may have been the utilization of nuclear receptor superfamily, in the regulation of lymphocytes and other cells of the immune lineage. Unlike, RAG, however, this superfamily occurs in all metazoans with the exception of sponges.