The 2002–3 pandemic caused by severe acute respiratory syndrome coronavirus (SARS-CoV) was one of the most significant public health events in recent history 1 . An ongoing outbreak of Middle East respiratory syndrome coronavirus (MERS-CoV) 2 suggests that this group of viruses remains a major threat and that their distribution is wider than previously recognized. Although bats have been suggested as the natural reservoirs of both viruses 3– 5 , attempts to isolate the progenitor virus of SARS-CoV from bats have been unsuccessful. Diverse SARS-like coronaviruses (SL-CoVs) have now been reported from bats in China, Europe and Africa 5– 8 , but none are considered a direct progenitor of SARS-CoV because of their phylogenetic disparity from this virus and the inability of their spike proteins (S) to use the SARS-CoV cellular receptor molecule, the human angiotensin converting enzyme II (ACE2) 9, 10 . Here, we report whole genome sequences of two novel bat CoVs from Chinese horseshoe bats (Family: Rhinolophidae) in Yunnan, China; RsSHC014 and Rs3367. These viruses are far more closely related to SARS-CoV than any previously identified bat CoVs, particularly in the receptor binding domain (RDB) of the S protein. Most importantly, we report the first recorded isolation of a live SL-CoV (bat SL-CoV-WIV1) from bat fecal samples in Vero E6 cells, which has typical coronavirus morphology, 99.9% sequence identity to Rs3367 and uses the ACE2s from human, civet and Chinese horseshoe bat for cell entry. Preliminary in vitro testing indicates that WIV1 also has a broad species tropism. Our results provide the strongest evidence to date that Chinese horseshoe bats are natural reservoirs of SARS-CoV, and that intermediate hosts may not be necessary for direct human infection by some bat SL-CoVs. They also highlight the importance of pathogen discovery programs targeting high-risk wildlife groups in emerging disease hotspots as a strategy for pandemic preparedness.