Gene family expansion illustrates a critical aspect of evolutionary adaptation. However, the mechanisms by which gene family expansions emerge and are maintained in the genome remain unclear. Here, we report de novo, nearly telomere-to-telomere (T2T), haplotype-phased genome assemblies of 2 coral species, Acropora tenuis and Acropora digitifera. By comparing haplotypes within a single individual and across species, we identified genomic regions spanning several megabases with highly disordered gene arrangements, termed non-syntenic regions (nSRs). In these nSRs, there are clusters of genes that emerged by lineage-specific gene family expansion. The gene repertoire within nSRs exhibits significant sequence diversity and distinct expression patterns, suggesting functional diversification. We propose that lineage-specific gene family expansion in nSRs occurs through recurrent tandem duplications mediated by non-allelic homologous recombination (NAHR) events, with nSRs serving as reservoirs for a diverse gene repertoire advantageous for survival. The nearly T2T-phased genomes provide new insights into the remarkable flexibility of genome organization and the evolution of gene family expansions.