The plant-pathogenic fungus Mycosphaerella graminicola causes septoria tritici blotch, one of the most economically important diseases of wheat worldwide and a potential threat to global food production. Unlike most other plant pathogens, M. graminicola has a long latent period during which it seems able to evade host defenses, and its genome appears to be unstable with many chromosomes that can change size or be lost during sexual reproduction. To understand its unusual mechanism of pathogenicity and high genomic plasticity, the genome of M. graminicola was sequenced more completely than that of any other filamentous fungus. The finished sequence contains 21 chromosomes, eight of which were different from those in the core genome and appear to have originated by ancient horizontal transfer from an unknown donor. The dispensable chromosomes collectively comprise the dispensome and showed extreme plasticity during sexual reproduction. A surprising feature of the M. graminicola genome was a low number of genes for enzymes that break down plant cell walls; this may represent an evolutionary response to evade detection by plant defense mechanisms. The stealth pathogenicity of M. graminicola may involve degradation of proteins rather than carbohydrates and could have evolved from an endophytic ancestor.