Abstract Background The white rot fungus Phlebia radiata, a type species of the genus Phlebia, is an efficient decomposer of plant cell wall polysaccharides, modifier of softwood and hardwood lignin, and is able to produce ethanol from various waste lignocellulose substrates. Thus, P. radiata is a promising organism for biotechnological applications aiming at sustainable utilization of plant biomass. Here we report the genome sequence of P. radiata isolate 79 originally isolated from decayed alder wood in South Finland. To better understand the evolution of wood decay mechanisms in this fungus and the Polyporales phlebioid clade, gene content and clustering of genes encoding specific carbohydrate-active enzymes (CAZymes) in seven closely related fungal species was investigated. In addition, other genes encoding proteins reflecting the fungal lifestyle including peptidases, transporters, small secreted proteins and genes involved in secondary metabolism were identified in the genome assembly of P. radiata. Results The PACBio sequenced nuclear genome of P. radiata was assembled to 93 contigs with 72X sequencing coverage and annotated, revealing a dense genome of 40.4 Mbp with approximately 14 082 predicted protein-coding genes. According to functional annotation, the genome harbors 209 glycoside hydrolase, 27 carbohydrate esterase, 8 polysaccharide lyase, and over 70 auxiliary redox enzyme-encoding genes. Comparisons with the genomes of other phlebioid fungi revealed shared and specific properties among the species with seemingly similar saprobic wood-decay lifestyles. Clustering of especially GH10 and AA9 enzyme-encoding genes according to genomic localization was discovered to be conserved among the phlebioid species. In P. radiata genome, a rich repertoire of genes involved in the production of secondary metabolites was recognized. In addition, 49 genes encoding predicted ABC proteins were identified in P. radiata genome together with 336 genes encoding peptidases, and 430 genes encoding small secreted proteins. Conclusions The genome assembly of P. radiata contains wide array of carbohydrate polymer attacking CAZyme and oxidoreductase genes in a composition identifiable for phlebioid white rot lifestyle in wood decomposition, and may thus serve as reference for further studies. Comparative genomics also contributed to enlightening fungal decay mechanisms in conversion and cycling of recalcitrant organic carbon in the forest ecosystems.