We sequenced the genome and multiple transcriptomes of the California two-spot octopus, Octopus bimaculoides, to investigate the molecular bases of cephalopod brain and body innovations. Coleoid cephalopods (octopus, squid, and cuttlefish) are active, resourceful predators with a rich behavioral repertoire. They have the largest nervous systems among the invertebrates, and present other extremes of morphological innovation including camera-like eyes, prehensile arms, fish-like early embryogenesis, and the most sophisticated adaptive coloration system among all animals.