BACKGROUND: Bdelloid rotifers are the oldest, most diverse and successful animal taxon for which males, hermaphrodites, and traditional meiosis are unknown. Their degenerate tetraploid genome, with 2-4 copies of most loci, includes thousands of genes acquired from all domains of life by horizontal transfer. Many bdelloid species thrive in ephemerally aquatic habitats by surviving desiccation at any life stage with no loss of fecundity or lifespan. Their unique genomic diversity and the intense selective pressure of desiccation provide an exceptional opportunity to study the evolution of diversity and novelty in genes involved in DNA repair. RESULTS: We used genomic data and RNA-Seq of the desiccation process in the bdelloid Adineta vaga to characterize DNA damage reversal, translesion synthesis, and the major DNA repair pathways: base, nucleotide, and alternate excision repair, mismatch repair (MMR), and double strand break repair by homologous recombination (HR) and classical non-homologous end joining (NHEJ). We identify multiple horizontally transferred DNA damage response genes otherwise unknown in animals (AlkD, Fpg, LigK UVDE), and the presence of genes often considered vertebrate specific, particularly in the NHEJ complex and X family polymerases. While 75-100% of genes involved in MMR and HR are present in 0-2 copies, genes involved in NHEJ, which are present in only a single copy in nearly all other animals, are retained in 3-8 copies. We present structural predictions and expression evidence of neo- or sub-functionalization of multiple copy genes involved in NHEJ and other repair processes. CONCLUSION: The horizontally-acquired genes and duplicated genes in BER and NHEJ suggest resilience to oxidative damage is conferred in part by increased DNA damage recognition and efficient end repair capabilities. The pattern of gene loss and retention in MMR and HR may facilitate recombination and gene conversion between divergent sequences, thus providing at least some of the benefits of sex. The unique retention and divergence of duplicates genes in NHEJ may be facilitated by the lack of efficient selection in the absence of meiotic recombination and independent assortment, and may contribute to the evolutionary success of bdelloids.