It's been ten years since developer Valve launched its Source game engine with Counter-Strike: Source and Half-Life 2. In that time, many games have used and updated it, such as Portal, Left 4 Dead, and even Titanfall. But there have been rumors for years that Valve has been working on its next engine, Source 2. Today, an update to the Dota 2 map editor and modding tools provide the most definitive evidence of the engine's existence. Further, the changes indicate that Valve may have actually launched the engine today by moving the editor's assets and code over to Source 2.
Posts on NeoGAF and Reddit have compiled the evidence found in the game's files, and general consensus is that the engine is real. According to Reddit user RoyAwesome, the most obvious evidence is a dramatic redesign of Valve's Hammer map editor. The interface and performance have been overhauled, and now you can choose between two map files: a ".vmap" file, and a "Source 1.0 Map (.vmf)" file.
Additionally, everything in the files that shares a name with something in the Source 1 engine is now labeled with a 2. For example, "engine.dll" is now "engine2.dll," and "vconsole.dll" is now "vconsole2.dll."
There are new lines of code relating to Xbox development, as well. Lines of code include "game/dota_imported/resource/ui/xboxdialogs.res@2166751." It's important to note that this in no way suggests that Dota 2 is coming to Xbox -- instead, what is likely is that it's some Source 2 code put in place for future Xbox game development.
Interestingly, this engine update also apparently includes hints to the rumored Left 4 Dead 3. Although we have not been able to confirm the presence of these references, user VoiDeD states that the code mentions Left 4 Dead 3 several times. In May, the co-creator of Counter-Strike said that the game is in development and "looks great."
Preface: this is the same site that reported that the new CoD would be set in WWI. But they owned up to it.