Specific interactions among proteins, nucleic acids, and metabolites drive virtually all cellular functions and underlie phenotypic complexity and diversity. Despite the fundamental importance of interactions, the mechanisms and dynamics by which they evolve are poorly understood. Here we describe novel interactions between a lineage-specific hormone and its receptors in elasmobranchs, a subclass of cartilaginous fishes, and infer how these associations evolved using phylogenetic and protein structural analyses. The hormone 1α-hydroxycorticosterone (1α-B) is a physiologically important steroid synthesized only in elasmobranchs. We show that 1α-B modulates gene expression in vitro by activating two paralogous intracellular transcription factors, the mineralocorticoid receptor (MR) and glucocorticoid receptor (GR), in the little skate Leucoraja erinacea; MR serves as a high-sensitivity and GR as a low-sensitivity receptor. Using functional analysis of extant and resurrected ancestral proteins, we show that receptor sensitivity to 1α-B evolved millions of years before the hormone itself evolved. The 1α-B differs from more ancient corticosteroids only by the addition of a hydroxyl group; the three-dimensional structure of the ancestral receptor shows that the ligand pocket contained ample unoccupied space to accommodate this moiety. Our findings indicate that the interactions between 1α-B and elasmobranch GR and MR proteins evolved by molecular exploitation: a novel hormone recruited into new functional partnerships two ancient receptors that had previously interacted with other ligands. The ancestral receptor's promiscuous capacity to fortuitously bind compounds that are slight structural variants of its original ligands set the stage for the evolution of this new interaction.