Abstract Background Diplonemid flagellates are among the most abundant and species-rich of known marine microeukaryotes, colonizing all habitats, depths, and geographic regions of the world ocean. However, little is known about their genomes, biology, and ecological role. Results We present the first nuclear genome sequence from a diplonemid, the type species Diplonema papillatum. The ~ 280-Mb genome assembly contains about 32,000 protein-coding genes, likely co-transcribed in groups of up to 100. Gene clusters are separated by long repetitive regions that include numerous transposable elements, which also reside within introns. Analysis of gene-family evolution reveals that the last common diplonemid ancestor underwent considerable metabolic expansion. D. papillatum-specific gains of carbohydrate-degradation capability were apparently acquired via horizontal gene transfer. The predicted breakdown of polysaccharides including pectin and xylan is at odds with reports of peptides being the predominant carbon source of this organism. Secretome analysis together with feeding experiments suggest that D. papillatum is predatory, able to degrade cell walls of live microeukaryotes, macroalgae, and water plants, not only for protoplast feeding but also for metabolizing cell-wall carbohydrates as an energy source. The analysis of environmental barcode samples shows that D. papillatum is confined to temperate coastal waters, presumably acting in bioremediation of eutrophication. Conclusions Nuclear genome information will allow systematic functional and cell-biology studies in D. papillatum. It will also serve as a reference for the highly diverse diplonemids and provide a point of comparison for studying gene complement evolution in the sister group of Kinetoplastida, including human-pathogenic taxa.