Biological soil crusts (biocrusts) cover the majority of the world's dryland ground and are a significant component of the vegetation-free surface of the planet. They consist of an intimate association of microbial organisms, lichens, bryophytes and fungi. Biocrusts are severely endangered by anthropogenic disturbances despite their importance. The genus Bracteacoccus (Sphaeropleales, Chlorophyta) is a ubiquitous component of biocrusts from extreme environments. Here, we present the chromosome-level genome sequences of two Bracteacoccus species, B. bullatus and B. minor. Genome comparisons with other Archaeplastida identify genomic features that highlight the adaptation of these algae to abiotic stresses prevailing in such environments. These features include horizontal gene transfer events mainly from bacteria or fungi, gains and expansions of stress-related gene families, neofunctionalization of genes following gene duplications and genome structural variations. We also summarize transcriptional and metabolic responses of the lipid pathway of B. minor, based on multi-omics analyses, which is important for balancing the flexible conversion of polar membrane lipids and non-polar storage lipids to cope with various abiotic stresses. Under dehydration and high-temperature stress conditions B. minor differs considerably from other eukaryotic algae. Overall, these findings provide insights into the genetic basis of adaptation to abiotic stress in biocrust algae.