Lipoic acid is an essential biomolecule found in all domains of life and is involved in central carbon metabolism and dissimilatory sulfur oxidation. The machineries for lipoate assembly in mitochondria and chloroplasts of higher eukaryotes, as well as in the apicoplasts of some protozoa, are all of prokaryotic origin. Here, we provide experimental evidence for a novel lipoate assembly pathway in bacteria based on a sLpl(AB) lipoate:protein ligase, which attaches octanoate or lipoate to apo-proteins, and 2 radical SAM proteins, LipS1 and LipS2, which work together as lipoyl synthase and insert 2 sulfur atoms. Extensive homology searches combined with genomic context analyses allowed us to precisely distinguish between the new and established pathways and map them on the tree of life. This not only revealed a much wider distribution of lipoate biogenesis systems than expected, in particular, the novel sLpl(AB)–LipS1/S2 pathway, and indicated a highly modular nature of the enzymes involved, with unforeseen combinations, but also provided a new framework for the evolution of lipoate assembly. Our results show that dedicated machineries for both de novo lipoate biogenesis and scavenging from the environment were implemented early in evolution and that their distribution in the 2 prokaryotic domains was shaped by a complex network of horizontal gene transfers, acquisition of additional genes, fusions, and losses. Our large-scale phylogenetic analyses identify the bipartite archaeal LplAB ligase as the ancestor of the bacterial sLpl(AB) proteins, which were obtained by horizontal gene transfer. LipS1/S2 have a more complex evolutionary history with multiple of such events but probably also originated in the domain archaea.