Summary Meliaceae is a useful plant family owing to its high‐quality timber and its many limonoids that have pharmacological and biological activities. Although some genomes of Meliaceae species have been reported, many questions regarding their unique family features, namely wood quality and natural products, have not been answered. In this study, we provide the whole‐genome sequence of Melia azedarach comprising 237.16 Mb with a contig N50 of 8.07 Mb, and an improved genome sequence of Azadirachta indica comprising 223.66 Mb with a contig N50 of 8.91 Mb. Moreover, genome skimming data, transcriptomes and other published genomes were comprehensively analysed to determine the genes and proteins that produce superior wood and valuable limonoids. Phylogenetic analysis of chloroplast genomes, single‐copy gene families and single‐nucleotide polymorphisms revealed that Meliaceae should be classified into two subfamilies: Cedreloideae and Melioideae. Although the Meliaceae species did not undergo additional whole‐genome duplication events, the secondary wall biosynthetic genes of the woody Cedreloideae species, Toona sinensis, expanded significantly compared to those of A. indica and M. azedarach, especially in downstream transcription factors and cellulose/hemicellulose biosynthesis‐related genes. Moreover, expanded special oxidosqualene cyclase catalogues can help diversify Sapindales skeletons, and the clustered genes that regulate terpene chain elongation, cyclization and modification would support their roles in limonoid biosynthesis. The expanded clans of terpene synthase, O‐methyltransferase and cytochrome P450, which are mainly derived from tandem duplication, are responsible for the different limonoid classes among the species. These results are beneficial for further investigations of wood development and limonoid biosynthesis.