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Background: It is generally thought that the evolutionary transition to parasitism is irreversible because it is associated with the loss of functions needed for a free-living lifestyle. Nevertheless, free-living taxa are sometimes nested within parasite clades in phylogenetic trees, which could indicate that they are secondarily free-living. Herein, we test this hypothesis by studying the genomic basis for evolutionary transitions between lifestyles in diplomonads, a group of anaerobic eukaryotes. Most described diplomonads are intestinal parasites or commensals of various animals, but there are also free-living diplomonads found in oxygen-poor environments such as marine and freshwater sediments. All these nest well within groups of parasitic diplomonads in phylogenetic trees, suggesting that they could be secondarily free-living., Results: We present a transcriptome study of Trepomonas sp. PC1, a diplomonad isolated from marine sediment. Analysis of the metabolic genes revealed a number of proteins involved in degradation of the bacterial membrane and cell wall, as well as an extended set of enzymes involved in carbohydrate degradation and nucleotide metabolism. Phylogenetic analyses showed that most of the differences in metabolic capacity between free-living Trepomonas and the parasitic diplomonads are due to recent acquisitions of bacterial genes via gene transfer. Interestingly, one of the acquired genes encodes a ribonucleotide reductase, which frees Trepomonas from the need to scavenge deoxyribonucleosides. The transcriptome included a gene encoding squalene-tetrahymanol cyclase. This enzyme synthesizes the sterol substitute tetrahymanol in the absence of oxygen, potentially allowing Trepomonas to thrive under anaerobic conditions as a free-living bacterivore, without depending on sterols from other eukaryotes., Conclusions: Our findings are consistent with the phylogenetic evidence that the last common ancestor of diplomonads was dependent on a host and that Trepomonas has adapted secondarily to a free-living lifestyle. We believe that similar studies of other groups where free-living taxa are nested within parasites could reveal more examples of secondarily free-living eukaryotes.