Genetically modified Metarhizium spp represent a major new arsenal for combating insect pests and insect-borne diseases. However, for these tools to be used safely and effectively, we need a much better understanding of their evolutionary potential and invasion ecology. In order to model natural as well as anthropogenic dispersal scenarios, we investigated evolutionary processes in a green fluorescent protein tagged strain of Metarhizium robertsii following transfer from a semitropical to a temperate soil community. Adaptive changes occurred over four years despite recurrent genetic bottlenecks and lack of recombination with locally well adapted strains. By coupling microarray-based functional analysis with DNA hybridizations we determined that expression of cell wall and stress response genes evolved at an accelerated rate in multiple replicates, whereas virulence determinants, transposons, and chromosome structure were unaltered. The mutable genes were enriched for TATA boxes possibly because they are larger mutational targets. In further field trials, we showed that the new mutations increased the fitness of M. robertsii in the new range by enhancing saprophytic associations, and these benefits were maintained in subsequent years. Consistent with selection being habitat rather than host specific, populations of an avirulent mutant cycled with seasons similarly to the wild type, whereas a mutant unable to adhere to plant roots showed a linear decrease in population. Our results provide a mechanistic basis for understanding postrelease adaptations, show that agents can be selected that lack gene flow and virulence evolution, and describe a means of genetically containing transgenic strains by disrupting the Mad2 gene.