The dinoflagellates have repeatedly replaced their ancestral peridinin-plastid by plastids derived from a variety of algal lineages ranging from green algae to diatoms. Here, we have characterized the genome of a dinoflagellate plastid of tertiary origin in order to understand the evolutionary processes that have shaped the organelle since it was acquired as a symbiont cell. To address this, the genome of the haptophyte-derived plastid in Karlodinium veneficum was analyzed by Sanger sequencing of library clones and 454 pyrosequencing of plastid enriched DNA fractions. The sequences were assembled into a single contig of 143 kb, encoding 70 proteins, 3 rRNAs and a nearly full set of tRNAs. Comparative genomics revealed massive rearrangements and gene losses compared to the haptophyte plastid; only a small fraction of the gene clusters usually found in haptophytes as well as other types of plastids are present in K. veneficum. Despite the reduced number of genes, the K. veneficum plastid genome has retained a large size due to expanded intergenic regions. Some of the plastid genes are highly diverged and may be pseudogenes or subject to RNA editing. Gene losses and rearrangements are also features of the genomes of the peridinin-containing plastids, apicomplexa and Chromera, suggesting that the evolutionary processes that once shaped these plastids have occurred at multiple independent occasions over the history of the Alveolata.