Viral genome integration provides a complex route to biological innovation that has rarely but repeatedly occurred in one of the most diverse lineages of organisms on the planet, parasitoid wasps. We describe a novel endogenous virus in braconid wasps derived from pathogenic alphanudiviruses. Limited to a subset of the genus Fopius, this recent acquisition allows an unprecedented opportunity to examine early endogenization events. Massive amounts of virus-like particles (VLPs) are produced in wasp ovaries. Unlike most endogenous viruses of parasitoid wasps, the VLPs do not contain DNA, translating to major differences in parasitism-promoting strategies. Rapid changes include genomic rearrangement, loss of DNA processing proteins, and wasp control of viral gene expression. These events precede the full development of tissue-specific viral gene expression observed in older associations. These data indicate that viral endogenization can rapidly result in functional and evolutionary changes associated with genomic novelty and adaptation in parasitoids.