Domains are modules within proteins that can fold and function independently and are evolutionarily conserved. Here we compared the usage and distribution of protein domain families in the free-living proteomes of Archaea, Bacteria and Eukarya and reconstructed species phylogenies while tracing the history of domain emergence and loss in proteomes. We show that both gains and losses of domains occurred frequently during proteome evolution. The rate of domain discovery increased approximately linearly in evolutionary time. Remarkably, gains generally outnumbered losses and the gain-to-loss ratios were much higher in akaryotes compared to eukaryotes. Functional annotations of domain families revealed that both Archaea and Bacteria gained and lost metabolic capabilities during the course of evolution while Eukarya acquired a number of diverse molecular functions including those involved in extracellular processes, immunological mechanisms, and cell regulation. Results also highlighted significant contemporary sharing of informational enzymes between Archaea and Eukarya and metabolic enzymes between Bacteria and Eukarya. Finally, the analysis provided useful insights into the evolution of species. The archaeal superkingdom appeared first in evolution by gradual loss of ancestral domains, bacterial lineages were the first to gain superkingdom-specific domains, and eukaryotes (likely) originated when an expanding proto-eukaryotic stem lineage gained organelles through endosymbiosis of already diversified bacterial lineages. The evolutionary dynamics of domain families in proteomes and the increasing number of domain gains is predicted to redefine the persistence strategies of organisms in superkingdoms, influence the make up of molecular functions, and enhance organismal complexity by the generation of new domain architectures. This dynamics highlights ongoing secondary evolutionary adaptations in akaryotic microbes, especially Archaea. 