Evolution through natural selection suggests unnecessary genes are lost. We observed that the yeast Candida glabrata lost the gene encoding a phosphate-repressible acid phosphatase (PHO5) present in many yeasts including Saccharomyces cerevisiae. However, C. glabrata still had phosphate starvation-inducible phosphatase activity. Screening a C. glabrata genomic library, we identified CgPMU2, a member of a three-gene family that contains a phosphomutase-like domain. This small-scale gene duplication event could allow for sub- or neofunctionalization. On the basis of phylogenetic and biochemical characterizations, CgPMU2 has neofunctionalized to become a broad range, phosphate starvation-regulated acid phosphatase, which functionally replaces PHO5 in this pathogenic yeast. We determined that CgPmu2, unlike ScPho5, is not able to hydrolyze phytic acid (inositol hexakisphosphate). Phytic acid is present in fruits and seeds where S. cerevisiae grows, but is not abundant in mammalian tissues where C. glabrata grows. We demonstrated that C. glabrata is limited from an environment where phytic acid is the only source of phosphate. Our work suggests that during evolutionary time, the selection for the ancestral PHO5 was lost and that C. glabrata neofunctionalized a weak phosphatase to replace PHO5. Convergent evolution of a phosphate starvation-inducible acid phosphatase in C. glabrata relative to most yeast species provides an example of how small changes in signal transduction pathways can mediate genetic isolation and uncovers a potential speciation gene.