The genome of the common marmoset (Callithrix jacchus) is the first South American (New World) primate genome to be sequenced. A female marmoset from the Southwest National Primate Center was sequenced using Sanger methods and assembled to contiguity that is comparable to available nonhuman primate genomes. Nucleotide substitutions in noncoding aligned regions show that the marmoset genome is ~89% identical to human, compared with >98% for chimpanzee and ~94% for rhesus macaque (an Old World monkey). This greater sequence difference, resulting from evolutionary change since divergence from Old World primates >35 MY ago, means the marmoset genome provides a valuable outgroup to the available primate genomes. Comparing the marmoset gene set that includes 21,168 loci identifies many gene families expanded or contracted relative to humans. We identified 37 positively selected genes on the marmoset lineage, 7 novel positively selected genes on the Old World branch, and 91 others newly detected as exhibiting selection in either New or Old World primates. Functional categories enriched for positive selection in marmosets include immunity, defense, sensory perception and mitochondrial ATP synthesis, while several genes critical to immune function in humans are absent. Marmosets exhibit several unusual physiological adaptations, including very small size, frequent twinning and hematopoietic chimerism, in which adults circulate leukocytes derived from hematopoietic stem cells that were transferred in utero from their co-twin. We found evidence of chimerism in the form of Y-chromosome sequences in the reads from the female reference animal. Eight other animals from the New England, Wisconsin and Southwest primate centers were sequenced to ~25x Illumina coverage, revealing >5 million SNPs and confirming chimerism in blood-derived DNA. Numerous polymorphic retroposon insertions were found (n=85). Further analysis of the reference sequence identified novel miRNA loci, as well as evidence of strong conservation of some miRNAs and rapid functionally significant change in others.