The present invention is generally directed to a hierarchical genome assembly process for producing high-quality de novo genome assemblies. The method utilizes a single, long-insert, shotgun DNA library in conjunction with Single Molecule, Real-Time (SMRT®) DNA sequencing, and obviates the need for additional sample preparation and sequencing data sets required for previously described hybrid assembly strategies. Efficient de novo assembly from genomic DNA to a finished genome sequence is demonstrated for several microorganisms using as little as three SMRT® cells, and for bacterial artificial chromosomes (BACs) using sequencing data from just one SMRT® Cell. Part of this new assembly workflow is a new consensus algorithm which takes advantage of SMRT® sequencing primary quality values, to produce a highly accurate de novo genome sequence, exceeding 99.999% (QV 50) accuracy. The methods are typically performed on a computer and comprise an algorithm that constructs sequence alignment graphs from pairwise alignment of sequence reads to a common reference.