Paper mulberry (Broussonetia papyrifera) is a well-known woody tree historically used for Cai Lun papermaking, one of the four great inventions of ancient China. More recently, Paper mulberry has also been used as forage to address the shortage of feedstuff because of its digestible crude fiber and high protein contents. In this study, we obtained a chromosome-scale genome assembly for Paper mulberry using integrated approaches, including Illumina and PacBio sequencing platform as well as Hi-C, optical, and genetic maps. The assembled Paper mulberry genome consists of 386.83 Mb, which is close to the estimated size, and 99.25% (383.93 Mb) of the assembly was assigned to 13 pseudochromosomes. Comparative genomic analysis revealed the expansion and contraction in the flavonoid and lignin biosynthetic gene families, respectively, accounting for the enhanced flavonoid and decreased lignin biosynthesis in Paper mulberry. Moreover, the increased ratio of syringyl-lignin to guaiacyl-lignin in Paper mulberry underscores its suitability for use in medicine, forage, papermaking, and barkcloth making. We also identified the root-associated microbiota of Paper mulberry and found that Pseudomonas and Rhizobia were enriched in its roots and may provide the source of nitrogen for its stems and leaves via symbiotic nitrogen fixation. Collectively, these results suggest that Paper mulberry might have undergone adaptive evolution and recruited nitrogen-fixing microbes to promote growth by enhancing flavonoid production and altering lignin monomer composition. Our study provides significant insights into genetic basis of the usefulness of Paper mulberry in papermaking and barkcloth making, and as forage. These insights will facilitate further domestication and selection as well as industrial utilization of Paper mulberry worldwide.