A transmembrane protein gene, c1orf37-dup, was identified as a young gene specific to humans. It was derived from the conserved c1orf37 gene through retroposition after the divergence of human and chimpanzee. This gene has evolved rapidly driven by positive Darwinian selection as evident from a significantly high ratio of non-synonymous substitution rate to synonymous substitution rate (K(a)/K(s)=2.08) between the new c1orf37-dup and the parental c1orf37 genes. Population genetics analysis disclosed a very low level of polymorphism in the c1orf37-dup gene and its neighboring regions, thus providing support for the occurrence of a recent selective sweep. The GFP experiments revealed that it encodes a transmembrane protein associated with cell membranes. Non-random distribution of amino acid changes indicates the C1ORF37-DUP protein may have evolved diverged functions in the presumably functionally important N-terminal region in the cytoplasm and the extracellular loop. These lines of evidence support that the functional adaptation of c1orf37-dup has occurred in humans. Unlike its ubiquitously expressed parental gene, c1orf37-dup expresses selectively in several human tissues including brain. It is suggested that c1orf37-dup encodes a novel transmembrane protein in humans which potentially endows new properties to cell surface interactions.