Background: Babesiosis is a socioeconomically important tick- borne disease of animals (including humans) caused by haemoprotozoan parasites. The severity of babesiosis relates to host and parasite factors, particularly virulence/pathogenicity. Although Babesia bovis is a particularly pathogenic species of cattle, there are species of Babesia of ruminants that have limited pathogenicity. For instance, the operational taxonomic unit Babesia sp. Xinjiang (abbreviated here as Bx) of sheep from China is substantially less virulent/pathogenic than B. bovis is in cattle. Although the reason for this distinctiveness is presently unknown, it is possible that Bx has a reduced ability to adhere to cells or evade/suppress immune responses, which might relate to particular proteins, such as the variant erythrocyte surface antigens (VESAs). Results: We sequenced and annotated the 8.4 Mb nuclear draft genome of Bx and compared it with those of B. bovis and B. bigemina by synteny analysis; we also investigated the genetic relationship of Bx with selected Babesia species and related apicomplexans for which genomic datasets are available, and explored the VESA complement in Bx. Conclusions: The availability of the Bx genome now provides unique opportunities to elucidate aspects of the molecular biology, biochemistry and physiology of Bx, and to explore the reason(s) for its limited virulence and/or apparent ability to evade immune attack by the host animal. Moreover, the present genomic resource and an in vitro culture system for Bx raises the prospect of establishing a functional genomic platform to explore essential genes as new intervention targets against babesiosis.