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Endosymbiosis of bacteria by eukaryotes is a defining feature of cellular evolution. In addition to well‐known bacterial origins for mitochondria and chloroplasts, multiple origins of bacterial endosymbiosis are known within the cells of diverse animals, plants and fungi. Early‐diverging lineages of terrestrial fungi harbor endosymbiotic bacteria belonging to the Burkholderiaceae. We sequenced the metagenome of the soil‐inhabiting fungus Mortierella elongata and assembled the complete circular chromosome of its endosymbiont, Mycoavidus cysteinexigens, which we place within a lineage of endofungal symbionts that are sister clade to Burkholderia. The genome of M. elongata strain AG77 features a core set of primary metabolic pathways for degradation of simple carbohydrates and lipid biosynthesis, while the M. cysteinexigens (AG77) genome is reduced in size and function. Experiments using antibiotics to cure …