BACKGROUND: The colonization of land and the diversification of terrestrial plants is intimately linked to the evolutionary history of their symbiotic fungal partners. Extant representatives of these fungal lineages include mutualistic plant symbionts, the arbuscular mycorrhizal (AM) fungi in Glomeromycota and fine root endophytes in Endogonales (Mucoromycota), as well as fungi with saprotrophic, pathogenic and endophytic lifestyles. These fungal groups separate into three monophyletic lineages but their evolutionary relationships remain enigmatic confounding ancestral reconstructions. Their taxonomic ranks are currently fluid. RESULTS: In this study, we recognize these three monophyletic linages as phyla, and use a balanced taxon sampling and broad taxonomic representation for phylogenomic analysis that rejects a hard polytomy and resolves Glomeromycota as sister to a clade composed of Mucoromycota and Mortierellomycota. Low copy numbers of genes associated with plant cell wall degradation could not be assigned to the transition to a plant symbiotic lifestyle but appears to be an ancestral phylogenetic signal. Both plant symbiotic lineages, Glomeromycota and Endogonales, lack numerous thiamine metabolism genes but the lack of fatty acid synthesis genes is specific to AM fungi. Many genes previously thought to be missing specifically in Glomeromycota are either missing in all analyzed phyla, or in some cases, are actually present in some of the analyzed AM fungal lineages, e.g. the high affinity phosphorus transporter Pho89. CONCLUSION: Based on a broad taxon sampling of fungal genomes we present a well-supported phylogeny for AM fungi and their sister lineages. We show that among these lineages, two independent evolutionary transitions to mutualistic plant symbiosis happened in a genomic background profoundly different from that known from the emergence of ectomycorrhizal fungi in Dikarya. These results call for further reevaluation of genomic signatures associated with plant symbiosis.