Simple sequence repeats (SSRs) are rare (approximately 1%) in most genomes and are generally considered to have no function. However, penaeid shrimp genomes have a high proportion of SSRs (>23%), raising the question of whether these SSRs play important functional and evolutionary roles in these SSR-rich species. Here, we show that SSRs drive genome plasticity and adaptive evolution in two penaeid shrimp species, Fenneropenaeus chinensis and Litopenaeus vannamei. Assembly and comparison of genomes of these two shrimp species at the chromosome-level revealed that transposable elements serve as carriers for SSR expansion, which is still occurring. The remarkable genome plasticity identified herein might have been shaped by significant SSR expansions. SSRs were also found to regulate gene expression by multi-omics analyses, and be responsible for driving adaptive evolution, such as the variable osmoregulatory capacities of these shrimp under low-salinity stress. These data provide strong evidence that SSRs are an important driver of the adaptive evolution in penaeid shrimp.