Genome sizes have evolved to vary widely, from 250 bases in viroids to 670 billion bases in some amoebas. This remarkable variation in genome size is the outcome of complex interactions between various evolutionary factors such as mutation rate and population size. While comparative genomics has uncovered how some of these evolutionary factors influence genome size, we still do not understand what drives genome size evolution. Specifically, it is not clear how the primordial mutational processes of base substitutions, insertions, and deletions influence genome size evolution in asexual organisms. Here, we use digital evolution to investigate genome size evolution by tracking genome edits and their fitness effects in real time. In agreement with empirical data, we find that mutation rate is inversely correlated with genome size in asexual populations. We show that at low point mutation rate, insertions are significantly more beneficial than deletions, driving genome expansion and the acquisition of phenotypic complexity. Conversely, the high mutational load experienced at high mutation rates inhibits genome growth, forcing the genomes to compress their genetic information. Our analyses suggest that the inverse relationship between mutation rate and genome size is a result of the tradeoff between evolving phenotypic innovation and limiting the mutational load.Genome sizes evolve by various mechanisms, some of which are common to all domains of life (insertions and deletions) while others are seen in some taxonomic groups more than others (horizontal gene transfer in bacteria and transposable element activity in eukaryotes). While one might think that genome expansion leads to the acquisition of more protein-coding genes and functions, genome size does not strongly correlate with organismal complexity (the C-value paradox). Whole-genome sequencing data provide some explanation for this paradox: appreciable variation in eukaryotic genome sizes has been attributed to ploidy 1 , and to an expansion of non-coding DNA such as introns, intergenic regions, and repeats 2 . Yet, genome size also positively correlates with the number of protein-coding genes 2 , suggesting that larger genome size is a prerequisite for gaining new genes that could lead to phenotypic innovation.The point mutation rate, relative frequencies of insertions and deletions (indels), and population size are three factors seen across the tree of life that are thought to influence genome size evolution. The negative correlation between genome size and point mutation rate is observed in all living organisms, from viruses to Homo sapiens 3 . However, a recent analysis based on more taxa found that this inverse relationship holds true only for prokaryotes and viruses, and that genome size and mutation rate are instead positively correlated in eukaryotes 4 . A high point mutation rate forces viruses to maintain small genome sizes in an effort to limit the number of deleterious mutations 5 . This selection pressure to reduce genome size is so strong that vir...