Munching on eucalypt leaves would kill most other mammals, but koalas have a large number of genes that enable them to tolerate their toxic diet.
However, the same genes also play a role in making some drugs used to treat sick and injured animals almost useless.
This double-edged sword is just one of the discoveries to come from an Australian-led project that has sequenced the entire koala genome.
The genetic blueprint is on par with the human genome, according to Rebecca Johnson of the Australian Museum Research Institute.
"We've found over 26,000 genes," said Professor Johnson, who co-led an international consortium of scientists from seven countries.
"We have sequenced and assembled the entire koala genome ... 3.5 billion base pairs, which is actually a little bit larger than the human genome."
The genome provides insights into the koala's highly specialised diet, immune system, biodiversity and evolution, Professor Johnson and her colleagues report in the journal Nature Genetics.
They said the information would guide conservation of the iconic animal, which is vulnerable to habitat loss, climate change and disease.
"It's such an important animal for our country, it's an important ambassador for understanding why habitat needs to be protected," Prof Johnson said.
Koalas are notoriously fussy about where they live and what they eat.
In the couple of hours a day they are not asleep in the crook of a tree, they eat their way through about 600-800 grams of leaves.
But not any leaves. They graze on only about 20 out of the 900 known species of eucalypt.
They also almost exclusively rely on the leaves for water, seeking out leaves with at least 50 per cent water content, Prof Johnson said.
"Understanding how koalas choose their trees and why they choose their trees at the molecular level is linked to ensuring they have something to eat and live in," she said.
Analysis of the genome shows koalas have lots of bitter taste receptors, as well as a duplication of what is known as a "water taste" gene.
"This might be ... a way they sense water in the trees," Professor Johnson said.
They also have a large number of genes that produce enzymes that detoxify terpenes and phenolic compounds.
"Everything needs detox [genes] but koalas seem to have them in much higher quantities," Professor Johnson said.
But there is a downside to this gene family, known as cytochrome P450 monooxygenase or CYP 450 genes.
The same enzymes that detoxify substances in the leaves also rapidly break down anti-inflammatory pain relief drugs.
"So giving [koalas] pain relief that uses these pathways is almost useless," Professor Johnson said.
The enzymes also effect the metabolism of antibiotics, said Peter Timms, of the University of the Sunshine Coast, who was also involved in the study.
"They break down antibiotics faster than we can give them. Then as we give them higher doses we then upset their gut flora bacteria," Professor Timms said.
Antibiotics are used to treat chlamydia, a bacterial disease that can cause blindness, sterility and urinary tract infections.
It appears that joeys may gain some protection against the disease from their mother's milk.
The team identified a number of genes involved in fine turning the composition of milk, including proteins that may have antimicrobial properties.
The challenge of treating koalas
Chlamydia affects all populations of koalas, Prof Timms said, whose team has been working on a vaccine for the infectious disease and the koala retrovirus.
The retrovirus, which has been linked to cancer, seems to make chlamydia worse.
"It's actually moving through the koala population in front of our eyes," Prof Timms said.
"The southern koalas aren't infected with it yet whereas the northern ones are."
Developing treatments for these diseases has been challenging because little was known about the animal's immune system.
"[The koala genome is] revolutionising both what we can understand but also what we can do," Professor Timms said.
The sequencing using state-of-the-art technology identified not only all the immune gene families and their functions, but provided insights into how the retrovirus has colonised the animal's DNA.
"For the first time we've been able to see how many times a virus is inside a single animal," Professor Timms said.
"And it's not all equal, there are different strains in there."
He said the level of detail will enable them to identify which strains are more dangerous so they can tweak tests and vaccines to target the virus.
"We couldn't do that before because we didn't know what to look for."
The genome will help Professor Timms and his team monitor how different animals respond to vaccines.
"Now we've got that information and we can start doing proper genetic studies on the animals," he said.
The project, which took five years to complete, is based on samples taken from three koalas: Pacific Chocolate and Bilbo, two female koalas who succumbed to chlamydia; and a male called Birke, who was mauled by a dog.
"Those are pretty emotive moments where you sit and watch an animal being necropsied (examined after death)," Professor Johnson said.
"It reminds you about why we're doing what we're doing."
The genetic information from the koalas, which were from northern New South Wales and southern Queensland, provided insights into the diversity of populations right around Australia.
"We found relatively high levels of genetic diversity in the Queensland and New South Wales population and much less diversity in Victorian and South Australian population," Professor Johnson said.
But, she said, Queensland populations were expected to drop by up to 50 per cent and New South Wales populations by 30 per cent within 20 years.
"Conservation measures are fairly urgent in that case because those are the populations that have all the diversity," she said.
Major threats to diversity include habitat fragmentation caused by clearing and urbanisation.
"If you have no diversity, you increase the chances of inbreeding and lots of genetic diseases can come about from a very low diversity population," Professor Johnson said.
The genome has been put on public databases for others to study.
"Researchers all over the world can now use it to study unique features or characteristics of the koala genome, or they can use it for comparative genomics," Professor Johnson said.
"This is only the fourth marsupial to be sequenced - and we have many marsupials in Australia."