Polydnaviruses (PDVs) are compelling examples of viral domestication, in which wasps express a large set of genes originating from a chromosomally integrated virus to produce particles necessary for their reproductive success. Parasitoid wasps generally use PDVs as a virulence gene delivery system allowing the protection of their progeny in the body of parasitized host. However, in the wasp Venturia canescens an independent viral domestication process led to an alternative strategy as the wasp incorporates virulence proteins in viral liposomes named virus-like particles (VLPs), instead of DNA molecules. Proteomic analysis of purified VLPs and transcriptome sequencing revealed the loss of some viral functions. In particular, the genes coding for capsid components are no longer expressed, which explains why VLPs do not incorporate DNA. Here a thorough examination of V. canescens genome revealed the presence of the pseudogenes corresponding to most of the genes involved in lost functions. This strongly suggests that an accumulation of mutations that leads to gene specific pseudogenization precedes the loss of viral genes observed during virus domestication. No evidence was found for block loss of collinear genes, although extensive gene order reshuffling of the viral genome was identified from comparisons between endogenous and exogenous viruses. These results provide the first insights on the early stages of large DNA virus domestication implicating massive genome reduction through gene-specific pseudogenization, a process which differs from the large deletions described for bacterial endosymbionts.