What mechanisms underlie the transitions responsible for the diverse shapes observed in the living world? Although bacteria exhibit a myriad of morphologies, the mechanisms responsible for the evolution of bacterial cell shape are not understood. We investigated morphological diversity in a group of bacteria that synthesize an appendage-like extension of the cell envelope called the stalk. The location and number of stalks varies among species, as exemplified by three distinct subcellular positions of stalks within a rod-shaped cell body: polar in the genus Caulobacter and subpolar or bilateral in the genus Asticcacaulis. Here we show that a developmental regulator of Caulobacter crescentus, SpmX, is co-opted in the genus Asticcacaulis to specify stalk synthesis either at the subpolar or bilateral positions. We also show that stepwise evolution of a specific region of SpmX led to the gain of a new function and localization of this protein, which drove the sequential transition in stalk positioning. Our results indicate that changes in protein function, co-option and modularity are key elements in the evolution of bacterial morphology. Therefore, similar evolutionary principles of morphological transitions apply to both single-celled prokaryotes and multicellular eukaryotes.