Abstract Lysin motif receptor–like kinases (LysM-RLKs) are involved in the perception of chitooligosaccharides (COs) and related lipochitooligosaccharides (LCOs) in plants. Expansion and divergence of the gene family during evolution have led to various roles in symbiosis and defense. By studying proteins of the LYR-IA subclass of LysM-RLKs of the Poaceae, we show here that they are high-affinity LCO-binding proteins with a lower affinity for COs, consistent with a role in LCO perception to establish arbuscular mycorrhiza (AM). In Papilionoid legumes, whole-genome duplication has resulted in two LYR-IA paralogs, MtLYR1 and MtNFP in Medicago truncatula, with MtNFP playing an essential role in root nodule symbiosis with nitrogen-fixing rhizobia. We show that MtLYR1 has retained the ancestral LCO-binding characteristic and is dispensable for AM. Domain swapping between the three LysMs of MtNFP and MtLYR1 and mutagenesis in MtLYR1 suggest that the MtLYR1 LCO-binding site is on the second LysM and that divergence in MtNFP led to better nodulation, but surprisingly with decreased LCO binding. These results suggest that divergence of the LCO-binding site has been important for the evolution of a role of MtNFP in nodulation with rhizobia.