Race-specific resistance genes protect the global wheat crop from stem rust disease caused by Puccinia graminis f. sp. tritici (Pgt) but are often overcome owing to evolution of new virulent races of the pathogen. To understand virulence evolution in Pgt, we identified the protein ligand (AvrSr50) recognized by the Sr50 resistance protein. A spontaneous mutant of Pgt virulent to Sr50 contained a 2.5 mega-base pair loss-of-heterozygosity event. A haustorial secreted protein from this region triggers Sr50-dependent defense responses in planta and interacts directly with the Sr50 protein. Virulence alleles of AvrSr50 have arisen through DNA insertion and sequence divergence, and our data provide molecular evidence that in addition to sexual recombination, somatic exchange can play a role in the emergence of new virulence traits in Pgt.