Microsporidia are eukaryotic parasites that infect essentially all animal species, including many of agricultural importance, and are significant opportunistic parasites of humans. They are characterized by having a specialized infection apparatus, an obligate intracellular lifestyle, rudimentary mitochondria and the smallest eukaryotic genomes. Extreme genome compaction has led to minimal gene sizes affecting even conserved ancient complexes such as the ribosome. Here we present the high-resolution cryo-EM structure of the microsporidian ribosome which illustrates how genome compaction has resulted in the smallest eukaryotic cytoplasmic ribosome. Selection pressure has led to the loss of two ribosomal proteins and removal of essentially all eukaryote-specific rRNA expansion segments reducing the ribosomal RNA to a functionally conserved core. The structure also highlights how one microsporidia-specific and several repurposed existing ribosomal proteins compensate for the extensive reduction of the rRNA. The microsporidian ribosome is kept in an inactive state by two previously uncharacterized dormancy factors that specifically target the functionally important E-site, P-site and polypeptide exit tunnel. This study visualizes the distinct effects of evolutionary pressure on RNA and protein coding genes, provides a new mechanism for ribosome inhibition and can serve as a structural basis for the development of small molecule inhibitors against microsporidian parasites.