Our knowledge of archaeal diversity and evolution has expanded rapidly in the past decade. However, hardly any genomes of the phylum Korarchaeota have been obtained due to the difficulty in accessing their natural habitats and – possibly – their limited abundance. As a result, many aspects of Korarchaeota biology, physiology and evolution remain enigmatic. Here, we expand this phylum with five high-quality metagenome-assembled genomes. This improved taxon sampling combined with sophisticated phylogenomic analyses robustly places Korarchaeota at the base of TACK and Asgard clades, revisiting the phylum’s long-assumed position. Furthermore, we observe a clear split between terrestrial and marine thermal clades. Gene tree-aware ancestral reconstructions suggest that the last Korarchaeota common ancestor was a thermophilic autotroph. In contrast, Korarchaeaceae, the lineage where environmental transitions occurred, shifted towards a heterotrophic lifestyle. Terrestrial Korarchaeota gained manycasand CARF genes indicating they may need to manage viral infections. Together, our study provides new insights into these early diverging Archaea and suggests that gradual gene gain and loss shaped their adaptation to different thermal environments.ImportanceKorarchaeota are an ancient group of archaea, but their biology, physiology and evolution have remained obscure. Analysis of five novel Korarchaeota MAGs, and publicly available reference data provides robust phylogenomic evidence that Korarchaeota are placed at the base of Asgard archaea and TACK, revisiting the phylum’s long-assumed position. Gene content reconstruction suggests a versatile thermophilic and autotrophic last Korarchaeota common ancestor. Environmental distribution surveying of public databases places all Korarchaeota in thermophilic environments and indicates that their habitat is limited to hydrothermal vents and hot springs. Our modeling indicates at least two transitions linked to habitat switching between these environments in the evolutionary history of Korarchaeota. Both are linked to a significant alteration of the inferred ancestral gene content, including a shift towards a heterotrophic and potential scavenging lifestyle. Furthermore, hot spring Korarchaeota acquired various genes participating in resistance to viruses, suggesting they may need to manage frequent viral threats.