Insertions and deletions (InDels) are frequently observed in natural protein evolution, yet their potential remains untapped in laboratory evolution. Here we introduce a transposon-based mutagenesis approach (TRIAD) to generate libraries of random variants with short in-frame InDels, and screen TRIAD libraries to evolve a promiscuous arylesterase activity in a phosphotriesterase. The evolution exhibits features that differ from previous point mutagenesis campaigns: while the average activity of TRIAD variants is more compromised, a larger proportion has successfully adapted for the activity. Different functional profiles emerge: (i) both strong and weak trade-off between activities are observed; (ii) trade-off is more severe (20- to 35-fold increased kcat/KM in arylesterase with 60-400-fold decreases in phosphotriesterase activity) and (iii) improvements are present in kcat rather than just in KM, suggesting adaptive solutions. These distinct features make TRIAD an alternative to widely used point mutagenesis, accessing functional innovations and traversing unexplored fitness landscape regions.