Cellobiose dehydrogenases (CDHs) are extracellular hemoflavoenzymes that are thought to be involved in the degradation of two of the most abundant biopolymers in the biosphere, cellulose and lignin. To date, these enzymes, consisting of a cytochrome domain and a flavin domain, have been detected and sequenced exclusively in the kingdom of fungi. Independent phylogenetic analyses of two distinct domains of CDH genes reveal that they evolved in parallel as fused genes. Whereas the cytochrome domains are unique sequence motifs, the flavin domains clearly belong to the glucose-methanol-choline (GMC) oxidoreductase family--an evolution line of widespread flavoproteins extending from the Archae to higher eukaryotes. The most probable unrooted phylogenetic tree obtained from our analysis of 52 selected GMC members reveals five principal evolutionary branches: cellobiose dehydrogenase, cholesterol oxidase (COX), hydroxynitrile lyase, alcohol oxidase (AOX)/glucose oxidase (GOX)/choline dehydrogenase, and a branch of dehydrogenases with various specificities containing also an Archaeon open reading frame (ORF). Cellobiose dehydrogenases cluster with cholesterol oxidases and the clade of various specificities, whereas hydroxynitrile lyases are closely related to glucose oxidases, alcohol oxidases, and choline dehydrogenases. The results indicate that the evolutionary line from a primordial GMC flavoprotein to extant cellobiose dehydrogenases was augmented after an early acquisition of the cytochrome domain to form two distinct branches for basidiomycetes and ascomycetes. One ascomycetous evolutionary line of CDHs has acquired a carbohydrate-binding module (CBM) of type 1, the sequence of which is similar to that of corresponding domains in several glycosidases. This is the first attempt towards a comprehensive phylogenetic analysis of cellobiose dehydrogenases.