The cytochrome P450 family 1 enzymes (CYP1s) are a diverse family of hemoprotein monooxygenases, which metabolize many xenobiotics including numerous environmental carcinogens. However, their historical function and evolution remain largely unstudied. Here we investigate CYP1 evolution via the reconstruction and characterization of the vertebrate CYP1 ancestors. Younger ancestors and extant forms generally demonstrated higher activity toward typical CYP1 xenobiotic and steroid substrates than older ancestors, suggesting significant diversification away from the original CYP1 function. Caffeine metabolism appears to be a recently evolved trait of the CYP1A subfamily, observed in the mammalian CYP1A lineage, and may parallel the recent evolution of caffeine synthesis in multiple separate plant species. Likewise, the aryl hydrocarbon receptor agonist, 6-formylindolo[3,2-b]carbazole (FICZ) was metabolized to a greater extent by certain younger ancestors and extant forms, suggesting that activity toward FICZ increased in specific CYP1 evolutionary branches, a process that may have occurred in parallel to the exploitation of land where UV-exposure was higher than in aquatic environments. As observed with previous reconstructions of P450 enzymes, thermostability correlated with evolutionary age; the oldest ancestor was up to 35 °C more thermostable than the extant forms, with a 10T50 (temperature at which 50% of the hemoprotein remains intact after 10 min) of 71 °C. This robustness may have facilitated evolutionary diversification of the CYP1s by buffering the destabilizing effects of mutations that conferred novel functions, a phenomenon which may also be useful in exploiting the catalytic versatility of these ancestral enzymes for commercial application as biocatalysts.