Annelida represents a large and morphologically diverse group of bilaterian organisms. The recently published polychaete and leech genome sequences revealed an equally dynamic range of diversity at the genomic level. The availability of more annelid genomes will allow for the identification of evolutionary genomic events that helped shape the annelid lineage and better understand the diversity within the group. We sequenced and assembled the genome of the common earthworm, Eisenia fetida. As a first pass at understanding the diversity within the group, we classified 440 earthworm homeoboxes and compared them to those of the leech Helobdella robusta and the polychaete Capitella teleta. We inferred many gene expansions occurring in the lineage connecting the most recent common ancestor (MRCA) of Capitella and Eisenia to the Eisenia/Helobdella MRCA. Likewise, the lineage leading from the Eisenia/Helobdella MRCA to the leech Helobdella robusta has experienced substantial gains and losses. However, the lineage leading from Eisenia/Helobdella MRCA to E. fetida is characterized by extraordinary levels of homeobox gain. The evolutionary dynamics observed in the homeoboxes of these lineages are very likely to be generalizable to all genes. These genome expansions and losses have likely contributed to the remarkable biology exhibited in this group. These results provide a new perspective from which to understand the diversity within these lineages, show the utility of sub-draft genome assemblies for understanding genomic evolution, and provide a critical resource from which the biology of these animals can be studied. The genome data can be accessed through the Eisenia fetida Genome Portal: http://ryanlab.whitney.ufl.edu/genomes/Efet/