Shigella species are specialised lineages of Escherichia coli that have converged to become human-adapted and cause dysentery by invading human gut epithelial cells. Most studies of Shigella evolution have been restricted to comparisons of single representatives of each species; and population genomic studies of individual Shigella species have focused on genomic variation caused by single nucleotide variants and ignored the contribution of insertion sequences (IS) which are highly prevalent in Shigella genomes. Here, we investigate the distribution and evolutionary dynamics of IS within populations of Shigella dysenteriae Sd1, Shigella sonnei and Shigella flexneri. We find that five IS (IS1, IS2, IS4, IS600 and IS911) have undergone expansion in all Shigella species, creating substantial strain-to-strain variation within each population and contributing to convergent patterns of functional gene loss within and between species. We find that IS expansion and genome degradation are most advanced in S. dysenteriae and least advanced in S. sonnei; and using genome-scale models of metabolism we show that Shigella species display convergent loss of core E. coli metabolic capabilities, with S. sonnei and S. flexneri following a similar trajectory of metabolic streamlining to that of S. dysenteriae. This study highlights the importance of IS to the evolution of Shigella and provides a framework for the investigation of IS dynamics and metabolic reduction in other bacterial species.