The evolution and functional integration of new genes, especially those that become core to key functions, remains enigmatic. We consider the mammal-specific gene, piggyBac transposable element derived 1 (PGBD1), implicated in neuronal disorders. While it no longer recognises piggyBac transposon-like inverted repeats and transposase functionality having been lost, it has evolved a core role in neural homeostasis. Depletion of PGBD1 triggers accumulation of mammal-specific paraspeckles and neural differentiation. It acts by two modalities, DNA binding and protein-protein interaction. As a transcriptional repressor of (lnc)NEAT1, the backbone of paraspeckles, it inhibits paraspeckle formation in neural progenitor cells (NPCs). At the protein level it is associated with the stress response system, a function partially shared with (lnc)NEAT1. PGBD1 thus presents as an unusual exemplar of new gene creation, being a recently acquired multi-function, multi-modal gene. Mammalian specificity associated with control of a mammal-specific structure implies coevolution of new genes with new functions.