Symbiodiniaceae dinoflagellates possess smaller nuclear genomes than other dinoflagellates and produce structurally specialized, biologically active, secondary metabolites. Till date, little is known about the evolution of secondary metabolism in dinoflagellates as comparative genomic approaches have been hampered by their large genome sizes. Here, we overcome this challenge by combining genomic and metabolomics approaches to investigate how chemical diversity arises in three decoded Symbiodiniaceae genomes (clades A3, B1 and C). Our analyses identify extensive diversification of polyketide synthase and non-ribosomal peptide synthetase genes from two newly decoded genomes of Symbiodinium tridacnidorum (A3) and Cladocopium sp. (C). Phylogenetic analyses indicate that almost all the gene families are derived from lineage-specific gene duplications in all three clades, suggesting divergence for environmental adaptation. Few metabolic pathways are conserved among the three clades and we detect metabolic similarity only in the recently diverged clades, B1 and C. We establish that secondary metabolism protein architecture guides substrate specificity and that gene duplication and domain shuffling have resulted in diversification of secondary metabolism genes.