Significance Proteins conduct numerous complex biological functions by use of tailored structural dynamics. The molecular details of how these emerged from ancestral peptides remains mysterious. How does nature utilize the same repertoire of folds to diversify function? To shed light on this, we analyzed bilobed proteins with a common structural core, which is spread throughout the tree of life and is involved in diverse biological functions such as transcription, enzymatic catalysis, membrane transport, and signaling. We show here that the structural dynamics of the structural core differentiate predominantly via terminal additions during a long-period evolution. This diversifies substrate specificity and, ultimately, biological function.