Most strains of the widespread endosymbiotic bacterium Wolbachia pipientis are benign or behave as reproductive parasites. The pathogenic strain wMelPop is a striking exception, however: it overreplicates in its insect hosts and causes severe life shortening. The mechanism of this pathogenesis is currently unknown. We have sequenced the genomes of three variants of wMelPop and of the closely related nonpathogenic strain wMelCS. We show that the genomes of wMelCS and wMelPop appear to be identical in the nonrepeat regions of the genome and differ detectably only by the triplication of a 19-kb region that is unlikely to be associated with life shortening, demonstrating that dramatic differences in the host phenotype caused by this endosymbiont may be the result of only minor genetic changes. We also compare the genomes of the original wMelPop strain from Drosophila melanogaster and two sequential derivatives, wMelPop-CLA and wMelPop-PGYP. To develop wMelPop as a novel biocontrol agent, it was first transinfected into and passaged in mosquito cell lines for approximately 3.5 years, generating wMelPop-CLA. This cell line-passaged strain was then transinfected into Aedes aegypti mosquitoes, creating wMelPop-PGYP, which was sequenced after 4 years in the insect host. We observe a rapid burst of genomic changes during cell line passaging, but no further mutations were detected after transinfection into mosquitoes, indicating either that host preadaptation had occurred in cell lines, that cell lines are a more selectively permissive environment than animal hosts, or both. Our results provide valuable data on the rates of genomic and phenotypic change in Wolbachia associated with host shifts over short time scales.