With the advent of high-throughput DNA sequencing and whole-genome analysis, it has become clear that the coding portions of the genome are organized hierarchically in gene families and superfamilies. Because the hierarchy of genes, like that of living organisms, reflects an ancient and continuing process of gene duplication and divergence, many of the conceptual and analytical tools used in phylogenetic systematics can and should be used in comparative genomics. Phylogenetic principles and techniques for assessing homology, inferring relationships among genes, and reconstructing evolutionary events provide a powerful way to interpret the ever increasing body of sequence data. In this review, we outline the application of phylogenetic approaches to comparative genomics, beginning with the inference of phylogeny and the assessment of gene orthology and paralogy. We also show how the phylogenetic approach makes possible novel kinds of comparative analysis, including detection of domain shuffling and lateral gene transfer, reconstruction of the evolutionary diversification of gene families, tracing of evolutionary change in protein function at the amino acid level, and prediction of structure-function relationships. A marriage of the principles of phylogenetic systematics with the copious data generated by genomics promises unprecedented insights into the nature of biological organization and the historical processes that created it.