Boxwood (Buxus spp.) are broad-leaved, evergreen landscape plants valued for their longevity and ornamental qualities. Volutella leaf and stem blight, caused by the ascomycete fungi Pseudonectria foliicola and P. buxi, is one of the major diseases affecting the health and ornamental qualities of boxwood. Although this disease is less severe than boxwood blight caused by Calonectria pseudonaviculata and C. henricotiae, its widespread occurrence and disfiguring symptoms have caused substantial economic losses to the ornamental industry. In this study, we sequenced the genome of P. foliicola isolate ATCC13545 using Illumina technology and compared it to other publicly available fungal pathogen genomes to better understand the biology of this organism. A de novo assembly estimated the genome size of P. foliicola at 28.7 Mb (425 contigs; N50 = 184,987 bp; avg. coverage 188×), with just 9,272 protein-coding genes. To our knowledge, P. foliicola has the smallest known genome within the Nectriaceae. Consistent with the small size of the genome, the secretome, CAzyme and secondary metabolite profiles of this fungus are reduced relative to two other surveyed Nectriaceae fungal genomes: Dactylonectria macrodidyma JAC15-245 and Fusarium graminearum Ph-1. Interestingly, a large cohort of genes associated with reduced virulence and loss of pathogenicity was identified from the P. foliicola dataset. These data are consistent with the latest observations by plant pathologists that P. buxi and most likely P. foliicola, are opportunistic, latent pathogens that prey upon weak and stressed boxwood plants.