Emerging data from the coelacanth genome are beginning to shed light on the origin and evolution of tetrapod genes and noncoding elements. Of particular relevance is the realization that coelacanth retains active copies of transposable elements that once served as raw material for the evolution of new functional sequences in the vertebrate lineage. Recognizing the evolutionary significance of coelacanth genome in this regard, we employed an ab initio search strategy to further classify its repetitive complement. This analysis uncovered a class of interspersed elements (Latimeria Harbinger 1-LatiHarb1) that is a major contributor to coelacanth genome structure and gene content (∼1% to 4% or the genome). Sequence analyses indicate that 1) each ∼8.7 kb LatiHarb1 element contains two coding regions, a transposase gene and a gene whose function is as yet unknown (MYB-like) and 2) copies of LatiHarb1 retain biological activity in the coelacanth genome. Functional analyses verify transcriptional and enhancer activities of LatiHarb1 in vivo and reveal transcriptional decoupling that could permit MYB-like genes to play functional roles not directly linked to transposition. Thus, LatiHarb1 represents the first known instance of a harbinger-superfamily transposon with contemporary activity in a vertebrate genome. Analyses of LatiHarb1 further corroborate the notion that exaptation of anciently active harbinger elements gave rise to at least two vertebrate genes (harbi1 and naif1) and indicate that the vertebrate gene tsnare1 also traces its ancestry to this transposon superfamily. Based on our analyses of LatiHarb1, we speculate that several functional features of harbinger elements may predispose the transposon superfamily toward recurrent exaptive evolution of cellular coding genes. In addition, these analyses further reinforce the broad utility of the coelacanth genome and other "outgroup" genomes in understanding the ancestry and evolution of vertebrate genes and genomes.