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The TnpB proteins are transposon-associated RNA-guided nucleases that are among the most abundant proteins encoded in bacterial and archaeal genomes, but whose functions in the transposon life cycle remain unknown. TnpB appears to be the evolutionary ancestor of Cas12, the effector nuclease of type V CRISPR-Cas systems. We performed a comprehensive census of TnpBs in archaeal and bacterial genomes and constructed a phylogenetic tree on which we mapped various features of these proteins. In multiple branches of the tree, the catalytic site of the TnpB nuclease is rearranged, demonstrating structural and probably biochemical malleability of this enzyme. We identified numerous cases of apparent recruitment of TnpB for other functions of which the most common is the evolution of type V CRISPR-Cas effectors on about 50 independent occasions. In many other cases of more radical exaptation, the catalytic site of the TnpB nuclease is apparently inactivated, suggesting a regulatory function, whereas in others, the activity appears to be retained, indicating that the recruited TnpB functions as a nuclease, for example, as a toxin. These findings demonstrate remarkable evolutionary malleability of the TnpB scaffold and provide extensive opportunities for further exploration of RNA-guided biological systems as well as multiple applications.