Diversification of mammalian species began more than 160 million years ago when the egg-laying monotremes diverged from live bearing mammals. The duck-billed platypus (Ornithorhynchus anatinus) and echidnas are the only potential contemporary witnesses of this period and, thereby, provide a unique insight into mammalian genome evolution. It has become clear that small RNAs are major regulatory agents in eukaryotic cells, and the significant role of non-protein-coding (npc) RNAs in transcription, processing, and translation is now well accepted. Here we show that the platypus genome contains more than 200 small nucleolar (sno) RNAs among hundreds of other diverse npcRNAs. Their comparison among key mammalian groups and other vertebrates enabled us to reconstruct a complete temporal pathway of acquisition and loss of these snoRNAs. In platypus we found cis- and trans-duplication distribution patterns for snoRNAs, which have not been described in any other vertebrates but are known to occur in nematodes. An exciting novelty in platypus is a snoRNA-derived retroposon (termed snoRTE) that facilitates a very effective dispersal of an H/ACA snoRNA via RTE-mediated retroposition. From more than 40,000 detected full-length and truncated genomic copies of this snoRTE, at least 21 are processed into mature snoRNAs. High-copy retroposition via multiple host gene-promoted transcription units is a novel pathway for combining housekeeping function and SINE-like dispersal and reveals a new dimension in the evolution of novel snoRNA function.