Fungi are a highly diverse group of heterotrophic eukaryotes characterized by the absence of phagotrophy and the presence of a chitinous cell wall. While unicellular fungi are far from rare, part of the evolutionary success of the group resides in their ability to grow indefinitely as a cylindrical multinucleated cell (hypha). Armed with these morphological traits and with an extremely high metabolical diversity, fungi have conquered numerous ecological niches and have shaped a whole world of interactions with other living organisms. Herein we survey the main evolutionary and ecological processes that have guided fungal diversity. We will first review the ecology and evolution of the zoosporic lineages and the process of terrestrialization, as one of the major evolutionary transitions in this kingdom. Several plausible scenarios have been proposed for fungal terrestralization and we here propose a new scenario, which considers icy environments as a transitory niche between water and emerged land. We then focus on exploring the main ecological relationships of Fungi with other organisms (other fungi, protozoans, animals and plants), as well as the origin of adaptations to certain specialized ecological niches within the group (lichens, black fungi and yeasts). Throughout this review we use an evolutionary and comparative‐genomics perspective to understand fungal ecological diversity. Finally, we highlight the importance of genome‐enabled inferences to envision plausible narratives and scenarios for important transitions.