Piwi-interacting RNA (piRNA) pathway is essential for germline specification, gametogenesis, and genome integrity as defense against transposable elements (TEs). This pathway has been suggested to have undergone rapid adaptive evolution in spite of its conserved role in TE silencing. However, with diverse sexual development patterns, piRNA pathway evolution and its adaptation to transposon activity in teleost lineages remain less known. This study illustrated the evolutionary significance of piRNA pathway via a systematic comparative analysis on diverse teleosts, including flatfish lineages. Molecular evolution of piRNA pathway and microRNA/small interfering RNA pathway genes indicated a faster evolution of piRNA pathway in teleosts than in mammals. Positive selection was detected at the PAZ (Piwi-Argonaute-Zwille) domain involved in Piwi-piRNA interaction, thereby suggesting that the amino acid substitutions were adaptive to their functions in teleost piRNA pathway. Notably, Piwil1 evolved faster in Japanese flounder than in other teleosts, and the piRNA pathway genes expressed higher in testes than in ovaries. In addition, gonadal transcriptomic analysis revealed male under-represented TE families mainly from DNA transposons, which were the potential targets of the complex formed by male-biased Piwi genes and male over-represented piRNAs in Japanese flounder testes. The potential piRNA-TE regulatory relationships suggested that the rapidly evolved piRNA pathway in Japanese flounder was likely involved in the regulation of transposon activity in germlines and could play important roles in Japanese flounder gonadal development and spermatogenesis.