Although lateral gene transfer (LGT) is now recognized as a major force in the evolution of prokaryotes, the contribution of LGT to the evolution and diversification of eukaryotes is less understood. Notably, transfers of complete pathways are believed to be less likely between eukaryotes, because the successful transfer of a pathway requires the physical clustering of functionally related genes. Here, we report that in one of the closest unicellular relatives of animals, the choanoflagellate, Monosiga, three genes whose products work together in the glutamate synthase cycle are of algal origin. The concerted retention of these three independently acquired genes is best explained as the consequence of a series of adaptive replacement events. More generally, this study argues that (i) eukaryote-to-eukaryote transfers of entire metabolic pathways are possible, (ii) adaptive functional replacements of primary pathways can occur, and (iii) functional replacements involving eukaryotic genes are likely to have also contributed to the evolution of eukaryotes. Lastly, these data underscore the potential contribution of algal genes to the evolution of nonphotosynthetic lineages.