Brown rot decay removes cellulose and hemicellulose from wood?residual lignin contributing up to 30percent of forest soil carbon?and is derived from an ancestral white rot saprotrophy in which both lignin and cellulose are decomposed. Comparative and functional genomics of the ?dry rot? fungus Serpula lacrymans, derived from forest ancestors, demonstrated that the evolution of both ectomycorrhizal biotrophy and brown rot saprotrophy were accompanied by reductions and losses in specific protein families, suggesting adaptation to an intercellular interaction with plant tissue. Transcriptome and proteome analysis also identified differences in wood decomposition in S. lacrymans relative to the brown rot Postia placenta. Furthermore, fungal nutritional mode diversification suggests that the boreal forest biome originated via genetic coevolution of above- and below-ground biota