Even in lieu of a dependable species concept for asexual organisms, the classification of bacteria into discrete taxonomic units is considered to be obstructed by the potential for lateral gene transfer (LGT) among lineages at virtually all phylogenetic levels. In most bacterial genomes, large proportions of genes are introduced by LGT, as indicated by their compositional features and/or phylogenetic distributions, and there is also clear evidence of LGT between very distantly related organisms. By adopting a whole-genome approach, which examined the history of every gene in numerous bacterial genomes, we show that LGT does not hamper phylogenetic reconstruction at many of the shallower taxonomic levels. Despite the high levels of gene acquisition, the only taxonomic group for which appreciable amounts of homologous recombination were detected was within bacterial species. Taken as a whole, the results derived from the analysis of complete gene inventories support several of the current means to recognize and define bacterial species.