The tetrapod neuronal protein ARC and its Drosophila melanogaster homolog, dARC1, have important but differing roles in neuronal development. Both are thought to originate through exaptation of ancient Ty3/Gypsy retrotransposon Gag, with their novel function relying on an original capacity for self-assembly and encapsidation of nucleic acids. Here, we present the crystal structure of dARC1 CA and examine the relationship between dARC1, mammalian ARC, and the CA protein of circulating retroviruses. We show that while the overall architecture is highly related to that of orthoretroviral and spumaretroviral CA, there are substantial deviations in both amino- and carboxyl-terminal domains, potentially affecting recruitment of partner proteins and particle assembly. The degree of sequence and structural divergence suggests that Ty3/Gypsy Gag has been exapted on two separate occasions and that, although mammalian ARC and dARC1 share functional similarity, the structures have undergone different adaptations after appropriation into the tetrapod and insect genomes.