Although metazoan body plans are remarkably diverse, the structure and function of many embryonic regulatory genes are conserved because large changes would be detrimental to development. However, the fushi tarazu (ftz) gene has changed dramatically during arthropod evolution from Hox-like to a pair-rule segmentation gene in Drosophila. Changes in both expression and protein sequence contributed to this new function: ftz expression switched from Hox-like to stripes and changes in Ftz cofactor interaction motifs led to loss of homeotic and gain of segmentation potential. Here, we reconstructed ftz changes in a rigorous phylogenetic context. We found that ftz did not simply switch from Hox-like to segmentation function; rather, ftz is remarkably labile, having undergone multiple changes in sequence and expression. The segmentation LXXLL motif was stably acquired in holometabolous insects after the appearance of striped expression in early insect lineages. The homeotic YPWM motif independently degenerated multiple times. These "degen-YPWMs" showed varying degrees of homeotic potential when expressed in Drosophila, suggesting variable loss of Hox function in different arthropods. Finally, the intensity of ftz Hox-like expression decreased to marginal levels in some crustaceans. We propose that decreased expression levels permitted ftz variants to arise and persist in populations without disadvantaging organismal development. This process, in turn, allowed evolutionary transitions in protein function, as weakly expressed "hopeful gene variants" were coopted into alternative developmental pathways. Our findings show that variation of a pleiotropic transcription factor is more extensive than previously imagined, suggesting that evolutionary plasticity may be widespread among regulatory genes. molecular evolution | protein module | cis-regulatory module D evelopmental regulatory genes encode transcription factors that participate in evolutionarily conserved gene regulatory networks (GRNs) crucial for regional specification and patterning during embryonic development (1-5). This "toolkit" of regulatory genes controls the development of diverse animals with different types of body plans (6). Furthermore, these genes are pleiotropic, being reused within individual animal lineages in different combinations and at different developmental stages (7). These findings raise two related issues. (i) How do regulatory genes change during evolution to direct the development of diverse animals? (ii) How can these changes be tolerated during development, as they are expected to be highly detrimental, reminiscent of Goldschmidt's "hopeful monster" (8)? The modularity of toolkit genes provides a partial answer to these questions, as it allows for changes in both expression and function in only specific tissues or at specific developmental times (9). Thus, although coding regions may be similar in diverse taxa, their differential expression resulting from changes in modular cis-regulatory elements (CREs) contributes to morphological dive...