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Oomycetes in the class Saprolegniomycetidae of the Eukaryotic kingdom Stramenopila have evolved as severe pathogens of amphibians, crustaceans, fish and insects, resulting in major losses in aquaculture and damage to aquatic ecosystems. We have sequenced the 63 Mb genome of the fresh water fish pathogen, Saprolegnia parasitica. Approximately 1/3 of the assembled genome exhibits loss of heterozygosity, indicating an efficient mechanism for revealing new variation. Comparison of S. parasitica with plant pathogenic oomycetes suggests that during evolution the host cellular environment has driven distinct patterns of gene expansion and loss in the genomes of plant and animal pathogens. S. parasitica possesses one of the largest repertoires of proteases (270) among eukaryotes that are deployed in waves at different points during infection as determined from RNA-Seq data. In contrast, despite being capable of living saprotrophically, parasitism has led to loss of inorganic nitrogen and sulfur assimilation pathways, strikingly similar to losses in obligate plant pathogenic oomycetes and fungi. The large gene families that are hallmarks of plant pathogenic oomycetes such as Phytophthora appear to be lacking in S. parasitica, including those encoding RXLR effectors, Crinkler's, and Necrosis Inducing-Like Proteins (NLP). S. parasitica also has a very large kinome of 543 kinases, 10% of which is induced upon infection. Moreover, S. parasitica encodes several genes typical of animals or animal-pathogens and lacking from other oomycetes, including disintegrins and galactose-binding lectins, whose expression and evolutionary origins implicate horizontal gene transfer in the evolution of animal pathogenesis in S. parasitica., Author Summary Fish are an increasingly important source of animal protein globally, with aquaculture production rising dramatically over the past decade. Saprolegnia is a fungal-like oomycete and one of the most destructive fish pathogens, causing millions of dollars in losses to the aquaculture industry annually. Saprolegnia has also been linked to a worldwide decline in wild fish and amphibian populations. Here we describe the genome sequence of the first animal pathogenic oomycete and compare the genome content with the available plant pathogenic oomycetes. We found that Saprolegnia lacks the large effector families that are hallmarks of plant pathogenic oomycetes, showing evolutionary adaptation to the host. Moreover, Saprolegnia harbors pathogenesis-related genes that were derived by lateral gene transfer from the host and other animal pathogens. The retrotransposon LINE family also appears to be acquired from animal lineages. By transcriptome analysis we show a high rate of allelic variation, which reveals rapidly evolving genes and potentially adaptive evolutionary mechanisms coupled to selective pressures exerted by the animal host. The genome and transcriptome data, as well as subsequent biochemical analyses, provided us with insight in the disease process of Saprolegnia at a molecular and cellular level, providing us with targets for sustainable control of Saprolegnia.