Genome data have created new opportunities to untangle evolutionary processes shaping microbial variation. Among bacteria, long-term mutualists of insects represent the smallest and (typically) most AT-rich genomes. Evolutionary theory provides a context to predict how an endosymbiotic lifestyle may alter fundamental evolutionary processes--mutation, selection, genetic drift, and recombination--and thus contribute to extreme genomic outcomes. These predictions can then be explored by comparing evolutionary rates, genome size and stability, and base compositional biases across endosymbiotic and free-living bacteria. Recent surprises from such comparisons include genome reduction among uncultured, free-living species. Some studies suggest that selection generally drives this streamlining, while drift drives genome reduction in endosymbionts; however, this remains an hypothesis requiring additional data. Unexpected evidence of selection acting on endosymbiont GC content hints that even weak selection may be effective in some long-term mutualists. Moving forward, intraspecific analysis offers a promising approach to distinguish underlying mechanisms, by testing the null hypothesis of neutrality and by quantifying mutational spectra. Such analyses may clarify whether endosymbionts and free-living bacteria occupy distinct evolutionary trajectories or, alternatively, represent varied outcomes of similar underlying forces.