Only decades after the introduction of organophosphate pesticides, bacterial phosphotriesterases (PTEs) have evolved to catalyze their degradation with remarkable efficiency. Their closest known relatives, lactonases, with promiscuous phosphotriasterase activity, dubbed PTE-like lactonases (PLLs), share only 30% sequence identity and also differ in the configuration of their active-site loops. PTE was therefore presumed to have evolved from a yet unknown PLL whose primary activity was the hydrolysis of quorum sensing homoserine lactones (HSLs) (Afriat et al. (2006) Biochemistry 45, 13677-13686). However, how PTEs diverged from this presumed PLL remains a mystery. In this study we investigated loop remodeling as a means of reconstructing a homoserine lactonase ancestor that relates to PTE by few mutational steps. Although, in nature, loop remodeling is a common mechanism of divergence of enzymatic functions, reproducing this process in the laboratory is a challenge. Structural and phylogenetic analyses enabled us to remodel one of PTE's active-site loops into a PLL-like configuration. A deletion in loop 7, combined with an adjacent, highly epistatic, point mutation led to the emergence of an HSLase activity that is undetectable in PTE (k(cat)/K(M) values of up to 2 × 10(4)). The appearance of the HSLase activity was accompanied by only a minor decrease in PTE's paraoxonase activity. This specificity change demonstrates the potential role of bifunctional intermediates in the divergence of new enzymatic functions and highlights the critical contribution of loop remodeling to the rapid divergence of new enzyme functions.