Chloroplasts arose from cyanobacteria, mitochondria arose from proteobacteria. Both organelles have conserved their prokaryotic biochemistry, but their genomes are reduced, and most organelle proteins are encoded in the nucleus. Endosymbiotic theory posits that bacterial genes in eukaryotic genomes entered the eukaryotic lineage via organelle ancestors. It predicts episodic influx of prokaryotic genes into the eukaryotic lineage, with acquisition corresponding to endosymbiotic events. Eukaryotic genome sequences, however, increasingly implicate lateral gene transfer, both from prokaryotes to eukaryotes and among eukaryotes, as a source of gene content variation in eukaryotic genomes, which predicts continuous, lineage-specific acquisition of prokaryotic genes in divergent eukaryotic groups. Here we discriminate between these two alternatives by sampling protein sequences from a wide range of phylogenetically diverse eukaryotes and by clustering and phylogenetic analysis of eukaryotic gene families having prokaryotic homologues. Our results indicate (1) that gene transfer from bacteria to eukaryotes is episodic, as revealed by gene distributions, and coincides with major evolutionary transitions at the origin of chloroplasts and mitochondria; (2) that gene inheritance in eukaryotes is vertical, as revealed by extensive topological comparison, sparse gene distributions stemming from differential loss; and (3) that continuous, lineage-specific lateral gene transfer, although it sometimes occurs, does not contribute to long-term gene content evolution in eukaryotic genomes.