Wheat powdery mildew, Blumeria graminis forma specialis tritici, is a devastating fungal pathogen with a poorly understood evolutionary history. Here we report the draft genome sequence of wheat powdery mildew, the resequencing of three additional isolates from different geographic regions and comparative analyses with the barley powdery mildew genome. Our comparative genomic analyses identified 602 candidate effector genes, with many showing evidence of positive selection. We characterize patterns of genetic diversity and suggest that mildew genomes are mosaics of ancient haplogroups that existed before wheat domestication. The patterns of diversity in modern isolates suggest that there was no pronounced loss of genetic diversity upon formation of the new host bread wheat 10,000 years ago. We conclude that the ready adaptation of B. graminis f.sp. tritici to the new host species was based on a diverse haplotype pool that provided great genetic potential for pathogen variation.