The origin of vertebrates is characterized by a suite of phenotypic innovations, yet the underlying genetic mechanisms remain poorly understood. As a living representative of jawless vertebrates, the lamprey serves as a pivotal model for investigating the genomic basis of early vertebrate evolution. Here, we report a near telomere-to-telomere (T2T) genome assembly of the reissner lamprey (Lethenteron reissneri), generated from sperm DNA that is not subject to programmed genome rearrangement. The 1.25 Gb assembly resolves over 97% of chromosome sequences into single contigs, enabling reconstruction of previously inaccessible genomic regions. Centromeres display highly diversified, lamprey-specific repeat units and structural architectures, whereas telomeres contain both conserved and lineage-specific satellite repeats. Deep transcriptomic profiling across representative organs and developmental stages substantially improved genome annotation. Comparative genomic analyses revealed a major expansion of 1,562 gene families at the base of the vertebrate lineage, and they are significantly enriched for functions related to neural development, skeletal formation, and cardiac function, echoing the known phenotypic innovations in vertebrates. Notably, the CDH2 gene family underwent vertebrate-specific copy number expansion and acquired conserved cis-regulatory elements (CREs), highlighting its potential role in shaping the early vertebrate circulatory system. Histological analyses and functional knockout experiments demonstrated that one CDH2 paralog (CDH2_H) is essential for lamprey heart development and chamber formation, playing a critical role in the emergence of the closed circulatory system in early vertebrates. This high-quality lamprey genome provides a foundational resource for dissecting the genetic basis of key innovations that shaped vertebrate evolution.