Endosymbiosis-where a microbe lives and replicates within a host-is an important contributor to organismal function that has accelerated evolutionary innovations and catalyzed the evolution of complex life. The evolutionary processes associated with transitions to endosymbiosis, however, are poorly understood. Here, we leverage the wide diversity of host-associated lifestyles of the genus Arsenophonus to reveal the complex evolutionary processes that occur during the transition to a vertically transmitted endosymbiotic lifestyle from strains maintained solely by horizontal (infectious) transmission. We compared the genomes of 38 strains spanning diverse lifestyles from horizontally transmitted pathogens to obligate interdependent endosymbionts. Among culturable strains, we observed those with vertical transmission had larger genome sizes than closely related horizontally transmitting counterparts, consistent with evolutionary innovation and the rapid gain of new functions. Increased genome size was a consequence of prophage and plasmid acquisition, including a cargo of type III effectors, alongside the concomitant loss of CRISPR-Cas genome defense systems, enabling mobile genetic element expansion. Persistent endosymbiosis was also associated with loss of type VI secretion, which we hypothesize to be a consequence of reduced microbe-microbe competition. Thereafter, the transition to endosymbiosis with strict vertical inheritance was associated with the expected relaxation of purifying selection, gene pseudogenization, metabolic degradation, and genome reduction. We argue that reduced phage predation in endosymbiotic niches drives the loss of genome defense systems driving rapid genome expansion upon the adoption of endosymbiosis and vertical transmission. This remodeling enables rapid horizontal gene transfer-mediated evolutionary innovation and precedes the reductive evolution traditionally associated with adaptation to endosymbiosis.

Centre for Infectious Diseases Research National Institute for Public Health and the Environment 3720 BA Bilthoven the Netherlands

Department of Biology University of Victoria Victoria BC V8P 5C2 Canada

Department of Parasitology Faculty of Science University of South Bohemia Branišovská 1645 31a 370 05 České Budějovice Czech Republic

Institute of Infection Veterinary and Ecological Sciences University of Liverpool Liverpool L59 7ZB UK

Institute of Infection Veterinary and Ecological Sciences University of Liverpool Liverpool L59 7ZB UK; Department of Biology University of Oxford 11a Mansfield Road Oxford OX1 3SZ UK; Department of Zoology University of British Columbia 6270 University Boulevard Vancouver BC V6T 1Z4 Canada; Department of Microbiology and Immunology University of British Columbia 1365 2350 Health Sciences Mall Vancouver BC V6T 1Z3 Canada

Institute of Infection Veterinary and Ecological Sciences University of Liverpool Liverpool L59 7ZB UK; Division of Evolution Infection and Genomics Faculty of Biology Medicine and Health University of Manchester Michael Smith Building Dover Street Manchester M13 9PT UK

NSW Health Pathology Infectious Diseases Department Wollongong Hospital Wollongong NSW Australia

School of Medicine Deakin University 75 Pigdons Road Waurn Ponds VIC 3216 Australia

School of Science Engineering and Environment University of Salford Manchester M5 4WT UK

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