The evolution of an obligate parasitic lifestyle is often associated with genomic reduction, in particular with the loss of functions associated with increasing host-dependence. This is evident in many parasites, but perhaps the most extreme transitions are from free-living autotrophic algae to obligate parasites. The best-known examples of this are the apicomplexans such as Plasmodium, which evolved from algae with red secondary plastids. However, an analogous transition also took place independently in the Helicosporidia, where an obligate parasite of animals with an intracellular infection mechanism evolved from algae with green primary plastids. We characterised the nuclear genome of Helicosporidium to compare its transition to parasitism with that of apicomplexans. The Helicosporidium genome is small and compact, even by comparison with the relatively small genomes of the closely related green algae Chlorella and Coccomyxa, but at the functional level we find almost no evidence for reduction. Nearly all ancestral metabolic functions are retained, with the single major exception of photosynthesis, and even here reduction is not complete. The great majority of genes for light-harvesting complexes, photosystems, and pigment biosynthesis have been lost, but those for other photosynthesis-related functions, such as Calvin cycle, are retained. Rather than loss of whole function categories, the predominant reductive force in the Helicosporidium genome is a contraction of gene family complexity, but even here most losses affect families associated with genome maintenance and expression, not functions associated with host-dependence. Other gene families appear to have expanded in response to parasitism, in particular chitinases, including those predicted to digest the chitinous barriers of the insect host or remodel the cell wall of Helicosporidium. Overall, the Helicosporidium genome presents a fascinating picture of the early stages of a transition from free-living autotroph to parasitic heterotroph where host-independence has been unexpectedly preserved.