Background: The Nile rat (Avicanthis niloticus) is an important animal model because of its robust diurnal rhythm, a cone-rich retina, and a propensity to develop diet-induced diabetes without chemical or genetic modifications. A closer similarity to humans in these aspects, compared to the widely used Mus musculus and Rattus norvegicus models, holds the promise of better translation of research findings to the clinic. Results: We report a 2.5 Gb, chromosome-level reference genome assembly with fully resolved parental haplotypes, generated with the Vertebrate Genomes Project (VGP). The assembly is highly contiguous, with contig N50 of 11.1 Mb, scaffold N50 of 83 Mb, and 95.2% of the sequence assigned to chromosomes. We used a novel workflow to identify 3613 segmental duplications and quantify duplicated genes. Comparative analyses revealed unique genomic features of the Nile rat, including some that affect genes associated with type 2 diabetes and metabolic dysfunctions. We discuss 14 genes that are heterozygous in the Nile rat or highly diverged from the house mouse. Conclusions: Our findings reflect the exceptional level of genomic resolution present in this assembly, which will greatly expand the potential of the Nile rat as a model organism.