Diverse proteins with similar structures are grouped into families of homologs and analogs, if their sequence similarity is higher or lower, respectively, than 20%-30%. It was suggested that protein homologs and analogs originate from a common ancestor and diverge in their distinct evolutionary time scales, emerging as a consequence of the physical properties of the protein sequence space. Although a number of studies have determined key signatures of protein family organization, the sequence-structure factors that differentiate the two evolution-related protein families remain unknown. Here, we stipulate that subtle structural changes, which appear due to accumulating mutations in the homologous families, lead to distinct packing of the protein core and, thus, novel compositions of core residues. The latter process leads to the formation of distinct families of homologs. We propose that such differentiation results in the formation of analogous families. To test our postulate, we developed a molecular modeling and design toolkit, Medusa, to computationally design protein sequences that correspond to the same fold family. We find that analogous proteins emerge when a backbone structure deviates only 1-2 angstroms root-mean-square deviation from the original structure. For close homologs, core residues are highly conserved. However, when the overall sequence similarity drops to approximately 25%-30%, the composition of core residues starts to diverge, thereby forming novel families of protein homologs. This direct observation of the formation of protein homologs within a specific fold family supports our hypothesis. The conservation of amino acids in designed sequences recapitulates that of the naturally occurring sequences, thereby validating our computational design methodology.