Red seaweeds are key components of coastal ecosystems and are economically important as food and as a source of gelling agents, but their genes and genomes have hitherto received little attention. Here we report the sequencing of the 105 Mbp genome of the florideophyte Chondrus crispus (Irish Moss) and the annotation of the 9,606 genes. The genome features an unusual structure, characterized by gene-dense regions surrounded by repeat-rich regions dominated by transposable elements. Despite its fairly large size, this genome shows features typical of compact genomes, e.g. on average only 0.3 introns per gene, short introns, low median distance between genes, small gene families, and no indication of large-scale genome duplication. The genome also gives insights into the metabolism of marine red algae, as well as adaptations to the marine environment, including genes related to halogen metabolism, oxylipins, and multicellularity (miRNA processing and transcription factors). Particularly interesting are features related to carbohydrate metabolism, including a minimalistic gene set for starch biosynthesis, the presence of cellulose synthases acquired before the primary endosymbiosis, showing the polyphyly of cellulose synthesis in Archaeplastida and cellulases absent in terrestrial plants as well as the occurrence of a mannosylglycerate synthase potentially originating from a marine bacterium. To explain the observations on genome structure and gene content we propose an evolutionary scenario which involves an ancestral red alga that was driven by early ecological forces to lose genes, introns and intergenetic DNA; this was followed by an expansion of genome size as a consequence of activity of transposable elements.