An important goal in molecular evolution is to understand the genetic and physical mechanisms by which protein functions evolve and, in turn, to characterize how a protein's physical architecture influences its evolution. Here we dissect the mechanisms for an evolutionary shift in function in the mollusk ortholog of the steroid hormone receptors (SRs), a family of biologically essential transcription factors. In vertebrates, the activity of SRs allosterically depends on binding a hormonal ligand; in mollusks, however, the SR ortholog (called ER, because of high sequence similarity to vertebrate estrogen receptors) activates transcription in the absence of ligand and does not respond to steroid hormones. To understand how this shift in regulation evolved, we combined evolutionary, structural, and functional analyses. We first determined the X-ray crystal structure of the ER of the Pacific oyster Crassostrea gigas (CgER), and found that its ligand pocket is filled with bulky residues that prevent ligand occupancy. To understand the genetic basis for the evolution of mollusk ERs' unique functions, we resurrected an ancient SR progenitor and characterized the effect of historical amino acid replacements on its functions. We found that reintroducing just two ancient replacements from the lineage leading to mollusk ERs recapitulates the evolution of full constitutive activity and the loss of ligand activation. These substitutions stabilize interactions among key helices, causing the allosteric switch to become “stuck” in the active conformation and making activation independent of ligand binding. Subsequent changes filled the ligand pocket without further affecting activity; by degrading the allosteric switch, these substitutions vestigialized elements of the protein's architecture required for ligand regulation and made reversal to the ancestral function more complex. These findings show how the physical architecture of allostery enabled a few large-effect mutations to trigger a profound evolutionary change in the protein's function and shaped the genetics of evolutionary reversibility.