Small genes (<150 nucleotides) have been systematically overlooked in phage genomes. We employ a large-scale comparative genomics approach to predict >40,000 small-gene families in ∼2.3 million phage genome contigs. We find that small genes in phage genomes are approximately 3-fold more prevalent than in host prokaryotic genomes. Our approach enriches for small genes that are translated in microbiomes, suggesting the small genes identified are coding. More than 9,000 families encode potentially secreted or transmembrane proteins, more than 5,000 families encode predicted anti-CRISPR proteins, and more than 500 families encode predicted antimicrobial proteins. By combining homology and genomic-neighborhood analyses, we reveal substantial novelty and diversity within phage biology, including small phage genes found in multiple host phyla, small genes encoding proteins that play essential roles in host infection, and small genes that share genomic neighborhoods and whose encoded proteins may share related functions.