I like this manuscript and I am close to recommend it. However, this new version is not that different from the previous one, about which I had made a number of comments. The new figures are welcome and the revised text is clearer at several places. Yet there are still a couple ambiguous phrasings and topics for discussion that should at least be mentioned. Here is a list of past and new comments:

Major Comments

• About rooting, I can accept the author's logic for the sake of the argument, but please be more cautious in the phrasing: "this [reflects => MIGHT REFLECT] functional differences rather than evolutionary history".
• Related to this point, I would like to get some argument in the text to better rule out ancestral paralogy in LUCA for SHC/OSC (e.g., not found at all in Archaea). This should come around these sentences: "Even if unintended by the authors, this implies a parallel origin of the two enzymes relative to the unknown outgroup, which would be outside of both bacteria and eukaryotes. It is unlikely that the tree should be rooted at this position, or at least should not be drawn this way."
• Two other comments in my original review have not been addressed yet. They pertain to Santana-Molina et al. 2020: 1) "SHC was the original enzyme, distributed across many bacterial lineages" (SM2020 says: "maybe not ancestral to all lineages"); 2) about a mitochondrial origin of OSC, SM2020 says that alpha-proteobacteria mostly lack OSC and I am not convinced by the author's answer "a single, ancient loss can remove the gene from nearly all alpha proteobacteria", except if the alpha-proteobacterial endosymbiont is assumed to be very deeply branched within the phylum.

Minor Comments

• Regarding endoymbiosis and inheritance, this might sound like nitpicking but, to be me, a gene is acquired from an endosymbiont, not inherited, the latter being vertical in nature. Thus, I would amend the following two sentences for clarity: 1) "and then being [inherited => ACQUIRED] by a pre-eukaryotic host from a bacterial endosymbiont"; 2) "This is explained by [vertical inheritance => HORIZONTAL ACQUISITION] from bacteria at the origin of eukarotes (probably endosymbiosis)."
• I am not sure about the meaning of Figure 1D: does the blue triangle correspond to additional eukaryotes? Or is it meant to depict the source of HGT to eukaryotes (with no arrow to highlight the events)?
• Please clarify the extent of the synonymy between SHC and STC at first occurrence in the text and/or add "stc" gene to Figure 1A, as done for the synonyms of OSC. Indeed, in the headings and figures, both STC and SHC are used interchangeably and are sometimes mentioned together as synonyms. This is somewhat confusing.

Typos (I provide context since there are no line numbers)

• appears to be widely misinterpretted => appears to be widely misinterpreted
• anaerobic eukarotes still retain => anaerobic eukaryotes still retain
• Two addition horizonal gene transfer events => Two additional horizonal gene transfer events
• other steroid compounds were show => other steroid compounds were shown
• One advantage could be intrinic properties => One advantage could be intrinsic properties
• this enzyme in functional at all => this enzyme is functional at all
• possesses enzymes to demthylate => possesses enzymes to demethylate

This is the second revision I make to the manuscript entitled “The eukaryotic last common ancestor was bifunctional for hopanoid and sterol production”, by Dr. Francis. First of all, I would like to apologise to Dr. Francis and Dr. Irisarri for the delay in my response. I was curious about the corrected version and wanted to participate in this second round, but the timing ended up being not so good for me.

Despite the many comments, suggestions, and corrections made during the first round, I think the author has done an excellent job addressing all the concerns, and has provided a thorough response to all of them. I do believe the manuscript has improved from the previous version. It might be because I have already read it before, but I find it easier to read and to understand. I’m recommending the acceptance of the manuscript.

However, it is worth mentioning that the major issue remains: the strength of the hypothesis depends on how reliable the rooting of the tree is. I am not very familar with these methods, but I wonder if some method designed to root phylogenetic trees without an outgroup (such as STRIDE, Emms and Kelly, 2017, MBE: https://doi.org/10.1093/molbev/msx259) could help with this. Likewise, not many weeks ago it was published the “rootstrap” method, aiming to assess the support for a given root in the tree (Naser-Khdour et al., 2021, Syst. Biol.: https://doi.org/10.1093/sysbio/syab067). Maybe they do not identify the “correct” placement of the root, but they might provide extra support to the hypothesis presented. This is more a suggestion than a request.

In any case, I acknowledge there is little that can be done on this regard and the author already addresses this issue correctly in the main text, but I also think this should be included in the recommendation that would be published in parallel to the manuscript. Future readers might find it useful.

Dear,

I consider that the author has contributed to improve the manuscript with the comments. However, I would like to emphasize in one of them. I mentioned that the methods about the trimming process for the matrix should be incorporated into the manuscript so I recommend to the author to add his reply to the method section.

The study of ancient organisms represents a major challenge in evolutionary biology, as the evidence is scarce and many hypotheses rely on sporadical observations. The development of phylogenetic methods has become an important addition to this field, allowing the use of extant species in comparative analyses under an historical perspective: if most of the lineages of a clade share a given trait, it is very likely that trait has been inherited from a common ancestor. Here, in the manuscript entitled “The eukaryotic last common ancestor was bifunctional for hopanoid and sterol production”, Dr. Francis uses such methods to explore the origin of the production of hopanoids and sterolds, two important membrane elements.

I really appreciate the simplicity of the methods, enough to answer the question proposed. Thus far, the analysis of the results and the presentation of the hypothesis are clear and well written, which makes this manuscript easy to read. I would like to congratulate the author for this effort. However, I do have one major concerns that is related to the general tone of the manuscript. Here, the author proposes a new hypothesys for the origin of SHC and OSC enzymes. After reading the manuscript a couple of times, I always have the feeling that the author presents this new hypothesys (LECA already had both enzymes) as a fact based on the evidence, but that is not true. I like this hypothesis and I think that is very likely, based on the results presented, but all the body of evidence relies in one simple assumption: that the tree must be rooted in one particular branch. Even if that rooting makes sense based in our current knowledge, the lack of an outgroup is a major burden because rooting the tree in a different branch might end up in a different story and we cannot disregard that possibility. This limitation is of course addressed in the main text, but I think the manuscript should never leave that “hypothetical ground”, if I may say so. To make this point clear: “an extended dataset suggests the presence of SHC and OSC in the LECA”, instead of “LECA already presented SHC and OSC”. Overall, I suggest the acceptance of this manuscript.

I also have some minor suggestions that the author might want to consider: - In general, I find confusing the use of so many acronyms along the text. SHC, STC, OCT, SQMO, HGT… I understand the use of these acronyms, it’s just that sometimes it requires an extra effort to understand what the author is talking about. - I wonder if hopanoids and steroids appear in the same rocky substrates and, if not, if there is evidence of one of them in more ancient rocks. In the conclussion the need of a thorough review of the fossil record is mentioned, and I agree that this would be a really valuable addition to this problem. - Page 7, “some bacteria appear have”: appear to have. - Page 8, “the genomes of cnidarians (corals and jellyfish), ctenophores”: and ctenophores.

The manuscript of W.R. Francis deals with an interesting problem: the origin and evolution of hopanoid/sterol biosynthetic pathways and especially of triterpene cyclase enzymes (SHC/STC and OSC).

I don't have strong feelings against this specific piece of work, except the fact that it was released one month after the publication of a large study covering the same topic (and more) by Devos et al. in Mol Biol Evol (2020) [doi:10.1093/molbev/msaa054]. Therefore, I think that the latter study should be mentioned and its findings discussed in the present manuscript to be really useful to the community.

My other comments are mostly minor and meant to clarify some points. Here is the list below.

- The introduction is just a bit too brief to fully understrand the study for someone not familiar with the pathways at play. Indeed, Fischer and Pearson (2007) do not provide an overview of the two pathways nor of their interplay, whereas Nes (2011) is too technical for the argument here while providing no details about hapanoids. Figure 1 in Devos et al. (2020) is much better in this respect, but still overly complex for what is needed here. Please consider adding a schematic figure (or panel to an existing figure) to efficiently set up the scentific background. This would also allow the author to precisely define what is STC, which is not yet achieved in the current version of the manuscript.

- I am convinced that the author knows what he is discussing. However, I am sometimes puzzled by the vocabulary. For example, this sentence is ambiguous to me: "All else being equal, the presence of OSC in some bacteria and stem eukaryotes is nonetheless best explained by primary inheritance of OSC by a pre-eukaryotic host from a bacterial endosymbiont." Similarly, "This is explained by vertical inheritance from bacteria at the origin of eukaryotes (probably endosymbiosis)" and "primary inheritance in the LECA from a bacterial endosymbiont at the origin of mitochondria" look confusing. In my opinion, it is important to distinguish the multiple possible cases here. Even if a pathway (or enzyme) is ancestral to all extant eukaryotes (i.e., present in LECA) and then vertically spread, it can be there for multiple reasons: 1) ancestral to all three domains (vertical evolution), 2) present in the archaeal host cell (if there was any such thing, again vertical evolution), 3) provided by a bacterial symbiont (e.g., the future mitochondrion, thus endosymbiosis), 4) "invented" along the eukaryotic stem (i.e., ESP, none of the above). Alternatively, the pathway (enzyme) can be introduced into a subset of extant eukaryotic lineages through H/LGT (horizontal/lateral evolution). These options should be clarified upfront. Regarding case (3), it may be useful to mention that, according to Devos et al. (2020), a mitochondrial origin of OSC is unlikely ("The scarcity of OSC in Alpha-proteobacteria indicates that this bacterial contribution is unlikely to be related to the mitochondria").

- Another example is the lengthy discussion about rooting (split into multiple parts in the manuscript). While I of course agree with the fact that most phylogenetic reconstructions do not yield rooted trees, I am less fond of the claim that rooting is necessarily an "arbitrary decision". What is required is external evidence, and indeed distinct functions in case of multigene families can be such evidence. Here, I have the impression that ancestrally duplicated genes (i.e., prior to the evolution of the three domains) appear unlikely to the author ("this implies a parallel origin of the two enzymes relative to the unknown outgroup"). Considering that such genes do exist, I think this position should be better argued. For some ideas about rooting the tree of life, I humbly refer to our own piece: Gouy et al. (2015) in Philos Trans R Soc Lond B Biol Sci [doi: 10.1098/rstb.2014.0329].

- Somewhat in opposition to the previous comment, Devos et al. (2020) argue that "the current data do not provide enough resolution to infer the presence of SHC in a common bacterial ancestor, although the results do indicate that the biosynthesis of hopanoid (defined by the SHC enzyme) precedes the diver- sification of the whole Gracilicutes group and some of the Terrabacteria taxa". This should be kept in mind for the first step of the scenario developed in the present study ("SHC was the original enzyme, distributed across many bacterial lineages"). Related to that, the following sentence is confusing ("nor is it clear which bacterial lineages may have possessed this enzyme due to horizontal gene transfer between prokaryotic lineages"). For me, the question is not well formulated: either SHC is ancestral to all existing bacteria and there is no point discussing extant lineages or it appeared in a lineage that was already distinct from other still-extant lineages and thus not ancestral to all. What is the author's hypothesis? Furthermore, the sentence about OSC emergence by duplication of SHC (or a SHC/OSC ancestor I would rather say if I reasoned as a pure cladist) draws a parallel with the distribution of SHC that is unjutified to me ("it is also currently unclear who this might be", emphasis mine) because OSC is much less extensively distributed among bacteria and thus the question of the lineage of origin appears more legitimate than for SHC.

- Co-emergence and/or co-evolution of OSC with SQMO ("It is very likely that this was coincident with the origin of SQMO") would make sense but is not strictly required since all these enzymes seem to exhibit some level of metabolic plasticity (see Devos et al., 2020). In the present work, SQMO distribution and evolution is not discussed at all. So it is difficult to take a stance about this issue. Related to that, understanding the "choice made in each [eukaryotic] lineage to keep either STC/SHC or OSC" would require to answer the following two questions: Can STC work after SQMO? Can OSC work without SQMO? All these points should be better discussed based on the current literature. In this respect, the explanatory ideas about the similarly patchy distribution of elongation factors (EF1a/EFL) might come handy (e.g., Keeling and Inagaki, 2004, PNAS; doi: 10.1073/pnas.0404505101).

- Regarding Methods and Figures, I think that they can be improved. Figure 1B should differentiate at least some bacterial groups if the origins of OSC (and eukaryotic SHC/STC) have to be discussed (as it appear to be the case in the main text, e.g., "Fungi have acquired SHC from an ancestor of Anaeromyxobacter, a delta-proteobacterium"). Moreover, some idea of the statistical support at important nodes is required to understand if there is phylogenetic resolution at all. For example, the dimensions of the alignment should be provided. Related to that, how were identified the MMETSP sequences (by TBLASTN searches against mRNA sequences or by BLASTP against predicted proteins)? How did the author deal with the contaminant sequences plaguing some samples of the original MMETSP dataset?