Enterococci are common members of the gut microbiome and their ease of culturing has facilitated worldwide use as indicators of fecal pollution of waters. However, enterococci were recently shown to persist in environmental habitats, often in the absence of fecal input, potentially confounding water quality assays. Toward resolving this issue and providing a more complete picture of natural enterococci diversity, 11 isolates of Enterococcus faecalis recovered from freshwater watersheds (environmental) were sequenced and compared to 59 available enteric genomes. Phenotypically and phylogenetically the environmental E. faecalis were indistinguishable from their enteric counterparts. However, distinct environmental- and enteric-associated gene signatures, encoding mostly accessory nutrient utilization pathways, were detected among the variable genes. Specifically, a nickel uptake operon was over-represented in environmental genomes, while genes for utilization of sugars thought to be abundant in the gut such as xylose were over-represented in enteric genomes. The distribution and phylogeny of these identified signatures suggest that ancestors of E. faecalis resided in extra-enteric habitats, challenging the prevailing commensal view of enterococci ecology. Thus, habitat-associated gene content changes faster than core genome phylogeny and may include biomarkers for reliably detecting fecal contaminants for improved microbial water quality monitoring.