Fungi have evolved powerful genomic and chemical defense systems to protect themselves against genetic destabilization and other organisms. However, the precise molecular basis involved in fungal defense remain largely unknown in Basidiomycetes. Here the complete genome sequence, as well as DNA methylation patterns and small RNA transcriptomes, was analyzed to provide a holistic overview of secondary metabolism and defense processes in the model medicinal fungus, Ganoderma sinense. We reported the 48.96 Mb genome sequence of G. sinense, consisting of 12 chromosomes and encoding 15,688 genes. More than thirty gene clusters involved in the biosynthesis of secondary metabolites, as well as a large array of genes responsible for their transport and regulation were highlighted. In addition, components of genome defense mechanisms, namely repeat-induced point mutation (RIP), DNA methylation and small RNA-mediated gene silencing, were revealed in G. sinense. Systematic bioinformatic investigation of the genome and methylome suggested that RIP and DNA methylation combinatorially maintain G. sinense genome stability by inactivating invasive genetic material and transposable elements. The elucidation of the G. sinense genome and epigenome provides an unparalleled opportunity to advance our understanding of secondary metabolism and fungal defense mechanisms.