Streptococcus thermophilus plays a pivotal role in yogurt fermentation, yet strains from traditional fermented products remain largely unexplored compared to their industrial counterparts. This study aimed to characterize the genomic diversity and functional potential of 15 S. thermophilus strains isolated from Turkish traditional yogurts, and to compare them with industrial strains. Through whole-genome sequencing and advanced bioinformatics analyses, we revealed distinct phylogenetic patterns and genetic features that differentiate these traditional strains from industrial isolates. The genomes (1.68–1.86 Mb) exhibited high genetic homogeneity (ANI > 98.69%) while maintaining significant functional diversity. Pan-genome analysis identified 1160 core genes and 5694 accessory genes, highlighting substantial genomic plasticity that enables niche adaptation. Our analysis uncovered several distinctive features: (1) unique phylogenetic clustering patterns based on both housekeeping genes and whole-genome SNPs, suggesting geographical isolation effects; (2) an extensive repertoire of carbohydrate-active enzymes (CAZymes), comprising 111 Glycoside Hydrolases, 227 Glycosyl Transferases, and 44 Carbohydrate Esterases and 13 Carbohydrate-Binding Modules, demonstrating sophisticated carbohydrate metabolism adaptation significantly enriched compared to industrial strains; (3) widespread GABA biosynthesis pathways in 8 strains, including complete gadB gene, indicating potential health-promoting properties; (4) multiple genomic islands containing genes for galactose utilization and stress response, suggesting specific adaptation to traditional fermentation environments; (5) diverse exopolysaccharide biosynthesis and bacteriocin gene clusters; and (6) widespread CRISPR-Cas systems with variable spacer content. Notably, we identified vanY glycopeptide resistance genes across all strains, with two strains additionally harboring vanT. These results reveal the genetic mechanisms behind S. thermophilus adaptation to traditional yogurt environments, offering valuable insights for developing starter cultures and preserving the unique qualities and potential health benefits of traditional dairy products.