A diploid genome in the Saccharumcomplex facilitates our understanding of evolution in the highly polyploid Saccharumgenus. Here we have generated a complete, gap-free genome assembly of Erianthus rufipilus, a diploid species within the Saccharumcomplex. The complete assembly revealed that centromere satellite homogenization was accompanied by the insertions of Gypsy retrotransposons, which drove centromere diversification. An overall low rate of gene transcription was observed in the palaeo-duplicated chromosome EruChr05 similar to other grasses, which might be regulated by methylation patterns mediated by homologous 24 nt small RNAs, and potentially mediating the functions of many nucleotide-binding site genes. Sequencing data for 211 accessions in the Saccharumcomplex indicated that Saccharumprobably originated in the trans-Himalayan region from a diploid ancestor (x= 10) around 1.9–2.5 million years ago. Our study provides new insights into the origin and evolution of Saccharumand accelerates translational research in cereal genetics and genomics.