Cladobotryum protrusum is one of the mycoparasites that cause cobweb disease on cultivated edible mushrooms. However, the molecular mechanisms of evolution and pathogenesis of C. protrusum on mushrooms are largely unknown. Here, we report a high-quality genome sequence of C. protrusum using the single-molecule, real-time sequencing platform of PacBio and perform a comparative analysis with closely related fungi in the family Hypocreaceae. The C. protrusum genome, the first complete genome to be sequenced in the genus Cladobotryum, is 39.09 Mb long, with an N50 of 4.97 Mb, encoding 11,003 proteins. The phylogenomic analysis confirmed its inclusion in Hypocreaceae, with its evolutionary divergence time estimated to be ~170.1 million years ago. The genome encodes a large and diverse set of genes involved in secreted peptidases, carbohydrate-active enzymes, cytochrome P450 enzymes, pathogen⁻host interactions, mycotoxins, and pigments. Moreover, C. protrusum harbors arrays of genes with the potential to produce bioactive secondary metabolites and stress response-related proteins that are significant for adaptation to hostile environments. Knowledge of the genome will foster a better understanding of the biology of C. protrusum and mycoparasitism in general, as well as help with the development of effective disease control strategies to minimize economic losses from cobweb disease in cultivated edible mushrooms.