Abstract Shigella are pathogens originating within the Escherichia lineage but frequently classified as a separate genus. Shigella genomes contain numerous insertion sequences (ISs) that lead to pseudogenization of affected genes and an increase of non-homologous recombination. Here, we study 414 genomes of E. coli and Shigella strains to assess the contribution of genomic rearrangements to Shigella evolution. We found that Shigella experienced exceptionally high rates of intragenomic rearrangements and had a decreased rate of homologous recombination compared to pathogenic and non-pathogenic E. coli . The high rearrangement rate resulted in independent disruption of syntenic regions and parallel rearrangements in different Shigella lineages. Specifically, we identified two types of chromosomally encoded E3 ubiquitin-protein ligases acquired independently by all Shigella strains that also showed a high level of sequence conservation in the promoter and further in the 5’ intergenic region. In the only available enteroinvasive E. coli (EIEC) strain, which is a pathogenic E. coli with a phenotype intermediate between Shigella and non-pathogenic E. coli , we found a rate of genome rearrangements comparable to those in other E. coli and no functional copies of the two Shigella -specific E3 ubiquitin ligases. These data indicate that accumulation of ISs influenced many aspects of genome evolution and played an important role in the evolution of intracellular pathogens. Our research demonstrates the power of comparative genomics-based on synteny block composition and an important role of non-coding regions in the evolution of genomic islands. Importance Pathogenic Escherichia coli strains frequently cause infections in humans. Many E. coli exist in nature and their ability to cause disease is fueled by their ability to incorporate novel genetic information by extensive horizontal gene transfer of plasmids and pathogenicity islands. The emergence of antibiotic-resistant Shigella spp., which are pathogenic forms of E. coli , coupled with the absence of an effective vaccine against them, highlights the importance of the continuing study of these pathogenic bacteria. Our study contributes to the understanding of genomic properties associated with molecular mechanisms underpinning the pathogenic nature of Shigella . We characterize the contribution of insertion sequences to the genome evolution of these intracellular pathogens and suggest a role of upstream regions of chromosomal ipaH genes in the Shigella pathogenesis. The methods of rearrangement analysis developed here are broadly applicable to the analysis of genotype-phenotype correlation in historically recently emerging bacterial pathogens.