Heritable facultative symbionts are common in insects and often play roles in host defense. Sequenced genomes are of intermediate size between obligate symbionts and free-living bacteria and contain bioactive factors located on mobile DNA. The symbiont Hamiltonella defensa is common in pea aphids where it provides protection against parasitoids with levels of protection correlating with the presence and type of a bacteriophages named APSE. In this study, we used in vitro cultures of two Hamiltonella strains 5DH and MI47H to produce high-quality, long-read whole genome sequences using PacBio. We then compared these genomes to each other and find they are remarkably similar except for the presence of different APSEs. Strain 5DH contains an APSE8-like variant that confers moderate protection against parasitoids, while strain MI47H contains variant APSE1 that confers high levels of protection. This strongly suggests a horizontal transfer of APSE that resulted in a large change in the protective phenotype. We also screened other Hamiltonella strains in this clade and find additional APSE variants, which suggests rapid evolution in defense against parasitoids may occur through phage exchange.