The shikimate dehydrogenases (SDH) represent a widely distributed enzyme family with an essential role in secondary metabolism. This superfamily had been previously subdivided into 4 enzyme groups (AroE, YdiB, SdhL, and RifI), which show clear biochemical and functional differences ranging from amino acid biosynthesis to antibiotic production. Despite the importance of this group, little is known about how such essential enzymatic functions can evolve and diversify. We dissected the enzyme superfamily with a phylogenomic analysis of approximately 250 fully sequenced genomes, making use of previously characterized representatives from each enzyme class, and the key substrate-binding residues known to distinguish substrate specificity. We identified 5 major evolutionary and functional SDH subgroups and several other potentially unique functional classes within this complex enzyme family and then validated the functional distinctiveness of each group by characterizing the 5 SDH homologs found in Pseudomonas putida KT2440 biochemically. We identified an entirely novel functionally distinct subgroup, which we designated Ael1 (AroE-like1) and also delineated a new group of shikimate/quinate dehydrogenases (YdiB2), which is phylogenetically distinct from the previously described Escherichia coli YdiB. The combination of biochemical, phylogenetic, and genomic approaches has revealed the broad extent to which the SDH enzyme superfamily has diversified. Five functional groups were validated with the potential for at least 5 additional subgroups. Our analysis also identified a new SDH functional group, which appears to have evolved recently from an ancestral AroE, illustrating a very prominent role of horizontal transmission and neofunctionalizaton in the evolutionary and functional diversification of this enzyme family.