Ancestral proteins trace the emergence of substrate specificity and oligomerization within bacterial DEDDy dinucleases.

Nucleases are crucial for various bacterial processes, including genome maintenance and host defense. Deoxydinucleases (diDNases), a class of Gram-positive bacteria-specific nucleases associated with mobile genetic elements, are homologous to nanoRNase C (NrnC) in Gram-negative bacteria but exhibit notable differences: diDNases form dimers and cleave DNA dinucleotides, whereas NrnC forms octamers that process both RNA and DNA dinucleotides. The mechanism by which substrate specificity emerged, and whether it is linked to oligomerization, remained unknown. Here, we reconstructed a common ancestor of diDNases and NrnC orthologs that forms a dimer with intermediate preference for DNA. Structures of ancestral and extant dinucleases reveal gradual changes in conformation that gave rise to substrate preference, oligomeric state, and catalytic efficiency. These findings highlight how subtle, concerted structural modifications enable large-scale changes in molecular assembly and functional specialization, harnessing a conserved protein fold. DNA dinucleotide preference in the early ancestor and preservation of DNase activity in all extant enzymes strongly argue for a biological function of DNA dinucleotides.