The ability to generate genetic variation facilitates rapid adaptation in stressful environments. The opportunistic fungal pathogen Candida albicans frequently undergoes large-scale genomic changes, including aneuploidy and loss of heterozygosity (LOH), following exposure to host environments. However, the specific host factors inducing C. albicans genome instability remain largely unknown. Here, we leveraged the genetic tractability of nematode hosts to investigate whether innate immune components, including antimicrobial peptides (AMPs) and reactive oxygen species (ROS), induced host-associated C. albicans genome instability. C. albicans associated with immunocompetent hosts carried multiple large-scale genomic changes, including LOH and whole-chromosomal and segmental aneuploidies. In contrast, C. albicans associated with immunocompromised hosts deficient in AMPs or ROS production had reduced LOH frequencies and fewer, if any, additional genomic changes. To evaluate whether extensive host-induced genomic changes had long-term consequences for C. albicans adaptation, we experimentally evolved C. albicans in either immunocompetent or immunocompromised hosts and selected for increased virulence. C. albicans evolved in immunocompetent hosts rapidly increased virulence, but C. albicans evolved in immunocompromised hosts did not. Taken together, this work suggests that host-produced ROS and AMPs induces genotypic plasticity in C. albicans which facilitates rapid evolution.