Water lilies belong to the angiosperm order Nymphaeales. Amborellales, Nymphaeales and Austrobaileyales together form the so-called ANA-grade of angiosperms, which are extant representatives of lineages that diverged the earliest from the lineage leading to the extant mesangiosperms1-3. Here we report the 409-megabase genome sequence of the blue-petal water lily (Nymphaea colorata). Our phylogenomic analyses support Amborellales and Nymphaeales as successive sister lineages to all other extant angiosperms. The N. colorata genome and 19 other water lily transcriptomes reveal a Nymphaealean whole-genome duplication event, which is shared by Nymphaeaceae and possibly Cabombaceae. Among the genes retained from this whole-genome duplication are homologues of genes that regulate flowering transition and flower development. The broad expression of homologues of floral ABCE genes in N. colorata might support a similarly broadly active ancestral ABCE model of floral organ determination in early angiosperms. Water lilies have evolved attractive floral scents and colours, which are features shared with mesangiosperms, and we identified their putative biosynthetic genes in N. colorata. The chemical compounds and biosynthetic genes behind floral scents suggest that they have evolved in parallel to those in mesangiosperms. Because of its unique phylogenetic position, the N. colorata genome sheds light on the early evolution of angiosperms.