An ongoing challenge to evolutionary developmental biology is to understand how developmental evolution on the level of populations and closely related species relates to macroevolutionary transformations and the origin of morphological novelties. Here we explore the developmental basis of beetle horns, a morphological novelty that exhibits remarkable diversity on a variety of levels. In this study, we examined two congeneric Onthophagus species in which males develop into alternative horned and hornless morphs and different sexes express marked sexual dimorphism. In addition, both species differ in the body region (head vs. thorax) that develops the horn. Using a comparative morphological approach we show that prepupal growth of horn primordia during late larval development, as well as reabsorption of horn primordia during the pupal stage, contribute to horn expression in adults. We also show that variable combinations of both mechanisms are employed during development to modify horn expression of different horns in the same individual, the same horn in different sexes, and different horns in different species. We then examine expression patterns of two transcription factors, Distal-less (Dll) and aristaless (al), in the context of prepupal horn growth in alternative male morphs and sexual dimorphisms in the same two species. Expression patterns are qualitatively consistent with the hypothesis that both transcription factors function in the context of horn development similar to their known roles in patterning a wide variety of arthropod appendages. Our results suggest that the origin of morphological novelties, such as beetle horns, rests, at least in part, on the redeployment of already existing developmental mechanisms, such as appendage patterning processes. Our results also suggest, however, that little to no phylogenetic distance is needed for the evolution of very different modifier mechanisms that allow for substantial modulation of trait expression at different time points during development in different species, sexes, or tissue regions of the same individual. We discuss the implications of our results for our understanding of the evolution of horned beetle diversity and the origin and diversification of morphological novelties.