Harpellales, an early-diverging fungal lineage, is associated with the digestive tracts of aquatic arthropod hosts. Concurrent with the production and annotation of the first four Harpellales genomes, we discovered that Zancudomyces culisetae, one of the most widely distributed Harpellales species, encodes an insect-like polyubiquitin chain. Ubiquitin and ubiquitin-like proteins are universally involved in protein degradation and regulation of immune response in eukaryotic organisms. Phylogenetic analyses inferred that this polyubiquitin variant has a mosquito origin. In addition, its amino acid composition, animal-like secondary structure, as well as the fungal nature of flanking genes all further support this as a horizontal gene transfer event. The single-copy polyubiquitin gene from Z. culisetae has lower GC ratio compared with homologs of insect taxa, which implies homogenization of the gene since its putatively ancient transfer. The acquired polyubiquitin gene may have served to improve important functions within Z. culisetae, by perhaps exploiting the insect hosts’ ubiquitin-proteasome systems in the gut environment. Preliminary comparisons among the four Harpellales genomes highlight the reduced genome size of Z. culisetae, which corroborates its distinguishable symbiotic lifestyle. This is the first record of a horizontally transferred ubiquitin gene from disease-bearing insects to the gut-dwelling fungal endobiont and should invite further exploration in an evolutionary context.