Background: Subtilisin-like serine proteases or Subtilases in fungi are important for penetration and colonization of host. In Hypocreales, these proteins share several properties with other fungal, bacterial, plant and mammalian homologs. However, adoption of specific roles in entomopathogenesis may be governed by attainment of unique biochemical and structural features during the evolutionary course. Due to such functional shifts Subtilases coded by different family members of Hypocreales acquire distinct features according to respective hosts and lifestyle. We conducted phylogenetic and DIVERGE analyses and identified important protein residues that putatively assign functional specificity to Subtilases in fungal families/species under the order Hypocreales. Results: A total of 161 Subtilases coded by 10 species from five different families under the fungal order Hypocreales was included in the analysis. Based on the presence of conserved domains, the Subtilase genes were divided into three subfamilies, Subtilisin (S08.005), Proteinase K (S08.054) and Serine-carboxyl peptidases (S53.001). These subfamilies were investigated for phylogenetic associations, protein residues under positive selection and functional divergence among paralogous clades. The observations were co-related with the life-styles of the fungal families/species. Phylogenetic and Divergence analyses of Subtilisin (S08.005) and Proteinase K (S08.054) families of proteins revealed that the paralogous clades were clear-cut representation of familial origin of the protein sequences. We observed divergence between the paralogous clades of plant-pathogenic fungi (Nectriaceae), insect-pathogenic fungi (Cordycipitaceae/Clavicipitaceae) and nematophagous fungi (Ophiocordycipitaceae). In addition, Subtilase genes from the nematode-parasitic fungus Purpureocillium lilacinum made a unique cluster which putatively indicated that the fungus might have developed distinctive mechanisms for nematode-pathogenesis. Our evolutionary genetics analysis revealed evidence of positive selection on the Subtilisin (S08.005) and Proteinase K (S08.054) protein sequences of the entomopathogenic and nematophagous species belonging to Cordycipitaceae, Clavicipitaceae and Ophiocordycipitaceae families of Hypocreales. Conclusions: Our study provided new insights into the evolution of Subtilisin like serine proteases in Hypocreales, a fungal order largely consisting of biological control species. Subtilisin (S08.005) and Proteinase K (S08.054) proteins seemed to play important roles during life style modifications among different families and species of Hypocreales. Protein residues found significant in functional divergence analysis in the present study may provide support for protein engineering in future.