Because of its ancient origin more than 1 billion years ago, the highly reduced plastid genomes of Plantae (e.g., plant chloroplasts) provide limited insights into the initial stages of endosymbiont genome reduction. The photosynthetic amoeba Paulinella provides a more useful model to study this process because its alpha-cyanobacterium–derived plastid originated ∼60 Ma and the genome still contains ∼1,000 genes. Here, we compared and contrasted features associated with genome reduction due to primary endosymbiosis in Paulinella plastids and in marine, free-living strains of the picocyanobacterium, Prochlorococcus. Both types of genomes show gene inactivation, concerted evolution, and contraction of gene families that impact highly conserved single-copy phylogenetic markers in the plastid such as psbA, psbC, and psbD. Our data suggest that these photosystem II genes may provide misleading phylogenetic signal because each of the constituent Plantae lineages has likely undergone a different, independent series of events that led to their reduction to a single copy. This issue is most problematic for resolving basal Plantae relationships when differential plastid gene loss was presumably ongoing, as we observe in Paulinella species. Our work uncovers a key, previously unappreciated aspect of organelle genome reduction and demonstrates “work-in-progress” models such as Paulinella to be critical to gain a fuller understanding of algal and plant genome evolution.