Successful establishment of long-term, obligate endosymbiotic relationships requires integration of hosts and endosymbionts across multiple levels. For example, highly integrated, host-beneficial endosymbionts typically have extremely reduced genomes and metabolisms. However, we do not yet fully understand the specific mechanisms that drive this integration or if there is a specific order in which these changes must occur. To investigate the early stages of endosymbiont genome reduction, we greatly expanded available whole genome data for the nitrogen-fixing endosymbionts (spheroid bodies, SBs) of diatoms in the family Rhopalodiaceae. We used these data to reconstruct SB evolutionary history and to characterize SB core metabolic capacity. We found two key genes missing from all SB genomes, mltA and dnaA, which could provide points of host control over SB cell division. Although most of the SB core genome is experiencing moderately strong purifying selection, we identified 54 genes under positive selection. Eighteen of these are peripheral proteins or involved in cell wall and cell membrane metabolism and could be involved in direct interactions with the host. Unexpectedly, we also found three nif genes under positive selection that are core to the central nitrogen-fixing enzyme. Overall, our results provide early insights into how SBs and their hosts interact, showing that SBs are still in the early stages of endosymbiont genome reduction, but they differ in key ways from current models, including the early loss of all mobile elements.