Our understanding of the divergence of bacteria, archaea, viruses, and mobile elements from the last universal common ancestor (LUCA) has not improved substantially since the crystallization hypothesis (explaining transition from cellular machinery to cellular life) was proposed by Woese. Here, we propose a hypothesis for the simultaneous emergence of bacteria, archaea, viruses, and mobile elements by sequential and concrete biochemical and cellular pathways. According to the hypothesis, the LUCA was a non-free-living pool of single operon type genomes composed of single-stranded (ss) RNA, double-stranded (ds) RNA, RNA/DNA hybrid, ssDNA, or dsDNA at an ancient submarine alkaline vent. Each dsDNA operon was transcribed by different systems in σ, TFIIB, or TBP genomes. Upon the fusion of multiple dsDNA operons by recombinase, the transcription system (in the σ, TFIIB, or TBP genome) was preferentially selected, leading to the first genetic linkage (described by Morgan). Vertical inheritance eventually led to Bacteria (σ genome) and Archaea (TBP genome). Eigen’s paradox (error catastrophe) can be overcome by the parallel gain of DNA replication and DNA repair mechanisms in both genomes. Enlarged DNA enabled efficient local biochemical reactions. Both genomes independently recruited lipids to facilitate reactions by forming coacervates (liquid droplets) at the chamber of the vent, leading to the lipid divide. Bilayer lipid membrane formation, proto-cell formation with a permeable membrane, proto-cell division, and the evolution of membrane-associated biochemistry are presented in detail. Simultaneous crystallization of systems in non-free-living bacteria and non-free-living archaea triggered the co-crystallization of primitive viruses and mobile elements. An arms race between non-free-living cells and primitive viruses finally led to free-living cells with a cell wall and mature viruses at the original vent. Cells and viruses spread to all vents on the planet, explaining the universality of the genetic code on Earth. The proposed scenario provides a plausible explanation for the origin of diverse taxa from the LUCA vertical and horizontal gene transfer.