As obligate symbionts of most land plants, arbuscular mycorrhizal fungi (AMF) have a crucial role in ecosystems, but to date, in the absence of genomic data, their adaptive biology remains elusive. In addition, endobacteria are found in their cytoplasm, the role of which is unknown. In order to investigate the function of the Gram-negative Candidatus Glomeribacter gigasporarum, an endobacterium of the AMF Gigaspora margarita, we sequenced its genome, leading to an ∼1.72-Mb assembly. Phylogenetic analyses placed Ca. G. gigasporarum in the Burkholderiaceae whereas metabolic network analyses clustered it with insect endobacteria. This positioning of Ca. G. gigasporarum among different bacterial classes reveals that it has undergone convergent evolution to adapt itself to intracellular lifestyle. The genome annotation of this mycorrhizal-fungal endobacterium has revealed an unexpected genetic mosaic where typical determinants of symbiotic, pathogenic and free-living bacteria are integrated in a reduced genome. Ca. G. gigasporarum is an aerobic microbe that depends on its host for carbon, phosphorus and nitrogen supply; it also expresses type II and type III secretion systems and synthesizes vitamin B12, antibiotics- and toxin-resistance molecules, which may contribute to the fungal host's ecological fitness. Ca. G. gigasporarum has an extreme dependence on its host for nutrients and energy, whereas the fungal host is itself an obligate biotroph that relies on a photosynthetic plant. Our work represents the first step towards unraveling a complex network of interphylum interactions, which is expected to have a previously unrecognized ecological impact.