Alkaliphilic fungi, i.e. fungi that grow optimally at high pH, are exceptional with only a handful of species described to date. Here, we sequenced the obligate alkaliphilic ascomycete S. alkalinus isolated from alkaline soda soils, and explored the features responsible for its unusual life-style. We found that PacC, the major regulator of alkaline-related genes, is up-regulated at higher pH values than PacC orthologues of neutrophilic species. To assess how this fungus can degrade carbohydrate sources under extremely alkalic conditions, we searched for the CAZymes encoded in the genome of S. alkalinus and performed enzyme assays. We revealed many cellulases, but their overall activity was low presumably because of slower induction. Although cellulolytic and hemicellulolytic activity was optimal at pH 6, there still was some activity at pH 10, at which pH it was completely absent in the neutrophilic A. oryzae. Excellent in vitro growth on xylan indicates that grasses are the preferred nutritional source for S. alkalinus in nature. We detected potent proteolytic activity at alkaline pH, compared to the neutrophilic A. oryzae, which may reflect the need for obtaining extra nitrogen, as this essential element becomes limiting at alkaline conditions. Proteins of bacterial cells, which are present in bulk at soda lakes, seem the likely source of nitrogen. In support of this hypothesis, we found several instances of horizontal transfer of prokaryotic genes into the genome of S. alkalinus, encoding enzymes that degrade bacterial cell walls. The genome of S. alkalinus will provide a valuable source to further study the biology and evolution of alkaliphilic trait in fungi with respect to neutrophilic species. In addition, it may provide alkaline-active metabolites of commercial interest.