The contrasting genome size between homosporous and heterosporous plants is fascinating. Different from the heterosporous seed plants and mainly homosporous ferns, the lycophytes are either heterosporous (Isoetales and Selaginellales) or homosporous (Lycopodiales). Many lycophytes are the resource plants of Huperzine A (HupA) which is invaluable for treating Alzheimer’s disease. For the seed-free vascular plants, several high-quality genomes of heterosporous Selaginella, homosporous ferns (maidenhair fern, monkey spider tree fern), and heterosporous ferns (Azolla) have been published and provided important insights into the origin and evolution of early land plants. However, the homosporous lycophyte genome has not been decoded. Here, we assembled the first homosporous lycophyte genome and conducted comparative genomic analyses by applying a reformed pipeline for filtering out non-plant sequences. The obtained genome size of Lycopodium clavatum is 2.30 Gb, distinguished in more than 85% repetitive elements of which 62% is long terminal repeat (LTR). This study disclosed a high birth rate and a low death rate of the LTR-RTs in homosporous lycophytes, but the opposite occurs in heterosporous lycophytes. we propose that the recent activity of LTR-RT is responsible for the immense genome size variation between homosporous and heterosporous lycophytes. By combing Ks analysis with a phylogenetic approach, we discovered two whole genome duplications (WGD). Morover, we identified all the five recognized key enzymes for the HupA biosynthetic pathway in the L. clavatum genome, but found this pathway incomplete in other major lineages of land plants. Overall, this study is of great importance for the medicinal utilization of lycophytes and the decoded genome data will be a key cornerstone to elucidate the evolution and biology of early vascular land plants.