Abstract The Arctic Ocean is being impacted by warming temperatures, increasing freshwater and highly variable ice conditions. The microalgal communities underpinning Arctic marine food webs, once thought to be dominated by diatoms, include a phylogenetically diverse range of small algal species, whose biology remains poorly understood. Here, we present genome sequences of a cryptomonad, a haptophyte, a chrysophyte, and a pelagophyte, isolated from the Arctic water column and ice. Comparing protein family distributions and sequence similarity across a densely-sampled set of algal genomes and transcriptomes, we note striking convergences in the biology of distantly related small Arctic algae, compared to non-Arctic relatives; although this convergence is largely exclusive of Arctic diatoms. Using high-throughput phylogenetic approaches, incorporating environmental sequence data from Tara Oceans, we demonstrate that this convergence was partly explained by horizontal gene transfers (HGT) between Arctic species, in over at least 30 other discrete gene families, and most notably in ice-binding domains (IBD). These Arctic-specific genes have been repeatedly transferred between Arctic algae, and are independent of equivalent HGTs in the Antarctic Southern Ocean. Our data provide insights into the specialized Arctic marine microbiome, and underlines the role of geographically-limited HGT as a driver of environmental adaptation in eukaryotic algae.