Comparative analyses of pathogen genomes provide new insights into how pathogens have evolved common and divergent virulence strategies to invade related plant species. Fusarium crown and root rots are important diseases of wheat and barley world-wide. In Australia, these diseases are primarily caused by the fungal pathogen Fusarium pseudograminearum. Comparative genomic analyses showed that the F. pseudograminearum genome encodes proteins that are present in other fungal pathogens of cereals but absent in non-cereal pathogens. In some cases, these cereal pathogen specific genes were also found in bacteria associated with plants. Phylogenetic analysis of selected F. pseudograminearum genes supported the hypothesis of horizontal gene transfer into diverse cereal pathogens. Two horizontally acquired genes with no previously known role in fungal pathogenesis were studied functionally via gene knockout methods and shown to significantly affect virulence of F. pseudograminearum on the cereal hosts wheat and barley. Our results indicate using comparative genomics to identify genes specific to pathogens of related hosts reveals novel virulence genes and illustrates the importance of horizontal gene transfer in the evolution of plant infecting fungal pathogens.