To explore the origins and consequences of tetraploidy in the African clawed frog, we sequenced the Xenopus laevis genome and compared it to the related diploid X. tropicalis genome. We characterize the allotetraploid origin of X. laevis by partitioning its genome into two homoeologous subgenomes, marked by distinct families of ‘fossil’ transposable elements. On the basis of the activity of these elements and the age of hundreds of unitary pseudogenes, we estimate that the two diploid progenitor species diverged around 34 million years ago (Ma) and combined to form an allotetraploid around 17-18 Ma. More than 56% of all genes were retained in two homoeologous copies. Protein function, gene expression, and the amount of conserved flanking sequence all correlate with retention rates. The subgenomes have evolved asymmetrically, with one chromosome set more often preserving the ancestral state and the other experiencing more gene loss, deletion, rearrangement, and reduced gene expression.