The Trypanosomatidae are protozoan parasites that infect insects, plants, and animals and have evolved complex monoxenous (single host) and dixenous (two hosts) lifestyles. A number of species of Trypanosomatidae, including Leishmania spp., have evolved the capacity to survive within intracellular niches in vertebrate hosts. The adaptations, metabolic and other, that are associated with development of intracellular lifestyles remain poorly defined. We show that genomes of Leishmania and Trypanosomatidae that can survive intracellularly encode a 2,4-dienoyl-CoA reductase that is involved in catabolism of a subclass of fatty acids. The trypanosomatid enzyme shows closest similarity to the corresponding bacterial enzymes and is located in the mitochondrion and essential for intracellular growth of Leishmania . The findings suggest that acquisition of this gene by lateral gene transfer from bacteria by ancestral monoxenous Trypanosomatidae likely contributed to the development of a dixenous lifestyle of these parasites.