The non-sexual horizontal transfer of genetic material across species boundaries is no longer considered a phenomenon occurring in bacteria only; increasingly it is reported in eukaryotes, including in animals. The extent and impact of horizontal gene transfer on animal evolution is not well understood; however, horizontal gene transfer is an evolutionary force with innovation potential – it can increase genomic variation, can directly transmit novel genes, and can provide sequence from which new genes can arise. Based on sequence similarities and genome location data, 576 putative horizontally transferred genes have been detected in a basal animal, the demosponge Amphimedon queenslandica. Within these genes, we found a large gene family of 83 bacterial-like aspzincins, a member of the metalloendopeptidase superfamily. We show that these genes are of bacterial origin, but result from one or few transfer events followed by extensive duplication. We suggest the transfer event(s) to be ancient since we have found bacterial-like aspzincins in seven additional sponge transcriptomes, which together represent both of the two major sponge lineages. Many of the aspzincins in A. queenslandica have striking transcriptional activity and have conserved the catalytically important residues; thus some may still have proteolytic activity. Our data support at least one case of transferred sequences fusing into one gene, creating a novel combination of an aspzincin and hemopexin domain containing protein. Together, these data contribute to our growing understanding of both the versatility of genomes and of the creative evolutionary power of horizontal gene transfer not only in bacteria, but across the web of life.