Background: Microsporidian Nosema bombycis has received much attention because the pébrine disease of domesticated silkworms results in great economic losses in the silkworm industry. So far, no effective treatment could be found for pébrine. Compared to other known Nosema parasites, N. bombycis can unusually parasitize a broad range of hosts. To gain some insights into the underlying genetic mechanism of pathological ability and host range expansion in this parasite, a comparative genomic approach is conducted. The genome of two Nosema parasites, N. bombycis and N. antheraeae (an obligatory parasite to undomesticated silkworms Antheraea pernyi), were sequenced and compared with their distantly related species, N. ceranae (an obligatory parasite to honey bees). Results: Our comparative genomics analysis show that the N. bombycis genome has greatly expanded due to the following three molecular mechanisms: 1) the proliferation of host-derived transposable elements, 2) the acquisition of many horizontally transferred genes from bacteria, and 3) the production of abundnant gene duplications. To our knowledge, duplicated genes derived not only from small-scale events (e.g., tandem duplications) but also from large-scale events (e.g., segmental duplications) have never been seen so abundant in any reported microsporidia genomes. Our relative dating analysis further indicated that these duplication events have arisen recently over very short evolutionary time. Furthermore, several duplicated genes involving in the cytotoxic metabolic pathway were found to undergo positive selection, suggestive of the role of duplicated genes on the adaptive evolution of pathogenic ability. Conclusions: Genome expansion is rarely considered as the evolutionary outcome acting on those highly reduced and compact parasitic microsporidian genomes. This study, for the first time, demonstrates that the parasitic genomes can expand, instead of shrink, through several common molecular mechanisms such as gene duplication, horizontal gene transfer, and transposable element expansion. We also showed that the duplicated genes can serve as raw materials for evolutionary innovations possibly contributing to the increase of pathologenic ability. Based on our research, we propose that duplicated genes of N. bombycis should be treated as primary targets for treatment designs against pébrine.