The mechanism by which protein functional diversity expands is an important evolutionary issue. Studies of recently evolved chimeric genes permit direct investigation of the origin of new protein functions before they become obscured by subsequent evolution. Found in several African Drosophila species, jingwei (jgw), a recently evolved gene with a domain derived from the still extant short-chain alcohol dehydrogenase (ADH) through retroposition, provides an opportunity to examine this previously undescribed process directly. We expressed JGW proteins in a microbial expression system and, after purification, investigated their enzymatic properties. We found that, unexpectedly, positive Darwinian selection for amino acid replacements outside the active site of JGW produced a novel dehydrogenase with altered substrate specificity compared with the ancestral ADH. Instead of detoxifying and assimilating ethanol like its Adh parental gene, we observe that JGW efficiently utilizes long-chain primary alcohols found in hormone and pheromone metabolism. These data suggest that protein functional diversity can expand rapidly under the joint forces of exon shuffling, gene duplication, and natural selection.