Mammalian AIM-2-like receptor (ALR) proteins bind nucleic acids and initiate production of type I interferons or inflammasome assembly, thereby contributing to host innate immunity. In mice, the locus is highly polymorphic at the sequence and copy number level, and we show here that it is one of the most dynamic regions of the genome. One rapidly evolving gene within this region, , was introduced to the genome by gene conversion or an unequal recombination event a few million years ago. has a large, distinctive repeat region that differs in sequence and length among species and even closely related inbred strains. We show that IFI207 controls murine leukemia virus (MLV) infection and that it plays a role in the STING-mediated response to cGAMP, dsDNA, DMXXA, and MLV. IFI207 binds to STING, and inclusion of its repeat region appears to stabilize STING protein. The locus and provide a clear example of the evolutionary innovation of gene function, possibly as a result of host-pathogen co-evolution.IMPORTANCEThe Red Queen hypothesis predicts that the arms race between pathogens and the host may accelerate evolution of both sides, and therefore causes higher diversity in virulence factors and immune-related proteins, respectively . The gene family in mice has undergone rapid evolution in the last few million years and includes the creation of two novel members, and , in particular, became highly divergent, with significant genetic changes between highly related inbred mice. IFI207 protein acts in the STING pathway and contributes to anti-retroviral resistance via a novel mechanism. The data show that under the pressure of host-pathogen coevolution in a dynamic locus, gene conversion and recombination between gene family members creates new genes with novel and essential functions that play diverse roles in biological processes.