Dinoflagellates are important components of marine ecosystems and essential coral symbionts, yet little is known about their genomes. We report here on the analysis of a high-quality assembly from the 1180-megabase genome of Symbiodinium kawagutii. We annotated protein-coding genes and identified Symbiodinium-specific gene families. No whole-genome duplication was observed, but instead we found active (retro)transposition and gene family expansion, especially in processes important for successful symbiosis with corals. We also documented genes potentially governing sexual reproduction and cyst formation, novel promoter elements, and a microRNA system potentially regulating gene expression in both symbiont and coral. We found biochemical complementarity between genomes of S. kawagutii and the anthozoan Acropora, indicative of host-symbiont coevolution, providing a resource for studying the molecular basis and evolution of coral symbiosis.