During a lifetime that can span several hundred years, a tree will be challenged by generations of parasites and will encounter a host of different limitations related to nutrition that will affect its growth and health. Concurrently, in different soil horizons, thousands of fungi vie with each other for a limited nutrient pool. In order to avoid competition, a wide range of plants and fungi have evolved the ability to form a mutualistic relationship – a niche market where the fungus provides nutrients not normally bioavailable to the plant in exchange for plant photosynthate. One class of mutualistic fungi is the ectomycorrhizal (ECM) fungi. This group of fungi, thought to have evolved from saprotrophic fungi, grows into the apoplast of the host root without disturbing plant cell integrity or the host defense response. In this review, we will focus our attention on the evolutionary history of ECM fungi, how their genomes differ from their saprotrophic cousins, and how unique aspects of their genomic repertoire allow them to colonize the niche of the plant root. A better understanding of the biology of ECM fungi will be important in the future to inform models of sustainable forest management and to improve the productivity of tree plantations in marginal soils.