Parasitism and saprotrophic wood decay are two fungal strategies fundamental for succession and nutrient cycling in forest ecosystems. An opportunity to assess the trade-off between these strategies is provided by the forest pathogen and wood decayer Heterobasidion annosum sensu lato. We report the annotated genome sequence and transcript profiling, as well as the quantitative trait loci mapping, of one member of the species complex: H similar to irregulare. Quantitative trait loci critical for pathogenicity, and rich in transposable elements, orphan and secreted genes, were identified. A wide range of cellulose-degrading enzymes are expressed during wood decay. By contrast, pathogenic interaction between H similar to irregulare and pine engages fewer carbohydrate-active enzymes, but involves an increase in pectinolytic enzymes, transcription modules for oxidative stress and secondary metabolite production. Our results show a trade-off in terms of constrained carbohydrate decomposition and membrane transport capacity during interaction with living hosts. Our findings establish that saprotrophic wood decay and necrotrophic parasitism involve two distinct, yet overlapping, processes.