Over the past decade, molecular phylogenetics has reshaped our understanding of the fungal tree of life by unraveling a hitherto elusive diversity of the protistan relatives of Fungi. Aphelida constitutes one of these novel deep branches that precede the emergence of osmotrophic fungal lifestyle and hold particular significance as the pathogens of algae. Here, we obtain and analyze the genomes of aphelid species Amoeboaphelidium protococcarum and Amoeboaphelidium occidentale. Genomic data unmask the vast divergence between these species, hidden behind their morphological similarity, and reveal hybrid genomes with a complex evolutionary history in two strains of A. protococcarum. We confirm the proposed sister relationship between Aphelida and Fungi using phylogenomic analysis and chart the reduction of characteristic proteins involved in phagocytic activity in the evolution of Holomycota. Annotation of aphelid genomes demonstrates the retention of actin nucleation-promoting complexes associated with phagocytosis and amoeboid motility and also reveals a conspicuous expansion of receptor-like protein kinases, uncharacteristic of fungal lineages. We find that aphelids possess multiple carbohydrate-processing enzymes that are involved in fungal cell wall synthesis but do not display rich complements of algal cell-wall-processing enzymes, suggesting an independent origin of fungal plant-degrading capabilities. Aphelid genomes show that the emergence of Fungi from phagotrophic ancestors relied on a common cell wall synthetic machinery but required a different set of proteins for digestion and interaction with the environment.