Knowledge of adaptive processes encompasses understanding the emergence of new genes. Computational analyses of genomes suggest that new genes can arise by domain swapping; however, empirical evidence has been lacking. Here we describe a set of nine independent deletion mutations that arose during selection experiments with the bacterium Pseudomonas fluorescens in which the membrane-spanning domain of a fatty acid desaturase became translationally fused to a cytosolic di-guanylate cyclase, generating an adaptive 'wrinkly spreader' phenotype. Detailed genetic analysis of one gene fusion shows that the mutant phenotype is caused by relocalization of the di-guanylate cyclase domain to the cell membrane. The relative ease by which this new gene arose, along with its functional and regulatory effects, provides a glimpse of mutational events and their consequences that are likely to have a role in the evolution of new genes.