Major changes in chromosome number and structure are linked to a series of evolutionary phenomena, including intrinsic barriers to gene flow or suppression of recombination due to chromosomal rearrangements. However, chromosome rearrangements can also affect the fundamental dynamics of molecular evolution within populations by changing relationships between linked loci and altering rates of recombination. Here, we build chromosome-level assembly Eueides isabella and, together with a recent chromosome-level assembly of Dryas iulia, examine the evolutionary consequences of multiple chromosome fusions in Heliconius butterflies. These assemblies pinpoint fusion points on 10 of the 20 autosomal chromosomes and reveal striking differences in the characteristics of fused and unfused chromosomes. The ten smallest autosomes in D. iulia and E. isabella, which have each fused to a longer chromosome in Heliconius, have higher repeat and GC content, and longer introns than predicted by their chromosome length. When fused, these characteristics change to become more in line with chromosome length. The fusions also led to reduced diversity, which likely reflects increased background selection and selection against introgression between diverging populations, following a reduction in per-base recombination rate. We further show that chromosome size and fusion impact turnover rates of functional loci at a macroevolutionary scale. Together these results provide further evidence that chromosome fusion in Heliconius likely had dramatic effects on population level processes shaping rates of neutral and adaptive divergence. These effects may have impacted patterns of diversification in Heliconius, a classic example of an adaptive radiation.