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Background  Improvement in the performance of eukaryotic microalgae for biofuel and bioproduct production is largely dependent on characterization of metabolic mechanisms within the cell. The marine diatom  Cyclotella cryptica,  which was originally identified in the Aquatic Species Program, is a promising strain of microalgae for large-scale production of biofuel and bioproducts, such as omega-3 fatty acids.    Results  We sequenced the nuclear genome and methylome of this oleaginous diatom to identify the genetic traits that enable substantial accumulation of triacylglycerol. The genome is comprised of highly methylated repetitive sequence, which does not significantly change under silicon starved lipid induction, and data further suggests the primary role of DNA methylation is to suppress DNA transposition. Annotation of pivotal glycolytic, lipid metabolism, and carbohydrate degradation processes reveal an expanded enzyme repertoire in  C. cryptica  that would allow for an increased metabolic capacity toward triacylglycerol production. Identification of previously unidentified genes, including those involved in carbon transport and chitin metabolism, provide potential targets for genetic manipulation of carbon flux to further increase its lipid phenotype. New genetic tools were developed, bringing this organism on a par with other microalgae in terms of genetic manipulation and characterization approaches.    Conclusions  Functional annotation and detailed cross-species comparison of key carbon rich processes in  C. cryptica  highlights the importance of enzymatic subcellular compartmentation for regulation of carbon flux, which is often overlooked in photosynthetic microeukaryotes. The availability of the genome sequence, as well as advanced genetic manipulation tools enable further development of this organism for deployment in large-scale production systems.    Electronic supplementary material  The online version of this article (doi:10.1186/s13068-016-0670-3) contains supplementary material, which is available to authorized users.

Genome and methylome of the oleaginous diatom Cyclotella cryptica reveal genetic flexibility toward a high lipid phenotype