Gene copies that stem from the mRNAs of parental source genes have long been viewed as evolutionary dead-ends with little biological relevance. Here we review a range of recent studies that have unveiled a significant number of functional retroposed gene copies in both mammalian and some non-mammalian genomes. These studies have not only revealed previously unknown mechanisms for the emergence of new genes and their functions but have also provided fascinating general insights into molecular and evolutionary processes that have shaped genomes. For example, analyses of chromosomal gene movement patterns via RNA-based gene duplication have shed fresh light on the evolutionary origin and biology of our sex chromosomes.