While genes encoding antigens and other highly polymorphic proteins are commonly found in subtelomeres, it is unusual to find a small family of housekeeping genes in these regions. We found that in the species Plasmodium falciparum only, a non-subtelomeric acyl-CoA synthetase (ACS) gene has expanded into a family of duplicated genes mainly located in the subtelomeres of the genome. We identified the putative parent of the duplicated family by analysis of synteny and phylogeny relative to other Plasmodium ACS genes. All ten ACS paralogs are transcribed in erythrocytic stages of laboratory and field isolates. We identified and confirmed a recent double gene conversion event involving ACS genes on three different chromosomes of isolate 3D7, resulting in the creation of a new hybrid gene. Southern hybridization analysis of geographically diverse P. falciparum isolates provides evidence for the strikingly global conservation of the ACS gene family, but also for some chromosomal events, including deletion and recombination, involving the duplicated paralogs. We found a dramatically higher rate of non-synonymous substitutions per non-synonymous site than synonymous substitutions per synonymous site in the closely related ACS paralogs we sequenced, suggesting that these genes are under a form of selection that favors change in the state of the protein. We also found that the gene encoding acyl-CoA binding protein has expanded and diversified in P. falciparum. We have described a new class of subtelomeric gene family with a unique capacity for diversity in P. falciparum.