Abstract: The term 'sake yeast' is generally used to indicate the Saccharomyces cerevisiae strains that possess characteristics distinct from others including the laboratory strain S288C and are well suited for sake brewery. Here, we report the draft whole-genome shotgun sequence of a commonly used diploid sake yeast strain, Kyokai no. 7 (K7). The assembled sequence of K7 was nearly identical to that of the S288C, except for several subtelomeric polymorphisms and two large inversions in K7. A survey of heterozygous bases between the homologous chromosomes revealed the presence of mosaic-like uneven distribution of heterozygosity in K7. The distribution patterns appeared to have resulted from repeated losses of heterozygosity in the ancestral lineage of K7. Analysis of genes revealed the presence of both K7-acquired and K7-lost genes, in addition to numerous others with segmentations and terminal discrepancies in comparison with those of S288C. The distribution of Ty element also largely differed in the two strains. Interestingly, two regions in chromosomes I and VII of S288C have apparently been replaced by Ty elements in K7. Sequence comparisons suggest that these gene conversions were caused by cDNA-mediated recombination of Ty elements. The present study advances our understanding of the functional and evolutionary genomics of the sake yeast.