Arbuscular mycorrhizal (AM) fungi form mutualistic relationships with most land plant species. AM fungi have long been considered as ancient asexuals. Long-term clonal evolution would be remarkable for a eukaryotic lineage and suggests the importance of alternative mechanisms to promote genetic variability facilitating adaptation. Here, we assessed the potential of transposable elements for generating such genomic diversity. The dynamic expression of TEs during Rhizophagus irregularis spore development suggests ongoing TE activity. We find Mutator-like elements located near genes belonging to highly expanded gene families. Whole-genome epigenomic profiling of R. irregularis provides direct evidence of DNA methylation and small RNA production occurring at TE loci. Our results support a model in which TE activity shapes the genome, while DNA methylation and small RNA–mediated silencing keep their overproliferation in check. We propose that a well-controlled TE activity directly contributes to genome evolution in AM fungi.