We report the genome of the facultative intracellular parasite Rhodococcus equi, the only animal pathogen within the biotechnologically important actinobacterial genus Rhodococcus. The 5.0-Mb R. equi 103S genome is significantly smaller than those of environmental rhodococci. This is due to genome expansion in nonpathogenic species, via a linear gain of paralogous genes and an accelerated genetic flux, rather than reductive evolution in R. equi. The 103S genome lacks the extensive catabolic and secondary metabolic complement of environmental rhodococci, and it displays unique adaptations for host colonization and competition in the short-chain fatty acid-rich intestine and manure of herbivores--two main R. equi reservoirs. Except for a few horizontally acquired (HGT) pathogenicity loci, including a cytoadhesive pilus determinant (rpl) and the virulence plasmid vap pathogenicity island (PAI) required for intramacrophage survival, most of the potential virulence-associated genes identified in R. equi are conserved in environmental rhodococci or have homologs in nonpathogenic Actinobacteria. This suggests a mechanism of virulence evolution based on the cooption of existing core actinobacterial traits, triggered by key host niche-adaptive HGT events. We tested this hypothesis by investigating R. equi virulence plasmid-chromosome crosstalk, by global transcription profiling and expression network analysis. Two chromosomal genes conserved in environmental rhodococci, encoding putative chorismate mutase and anthranilate synthase enzymes involved in aromatic amino acid biosynthesis, were strongly coregulated with vap PAI virulence genes and required for optimal proliferation in macrophages. The regulatory integration of chromosomal metabolic genes under the control of the HGT-acquired plasmid PAI is thus an important element in the cooptive virulence of R. equi.