Eukaryotic cells arose through the uptake of free-living bacteria by endosymbiosis and their gradual conversion into organelles (plastids and mitochondria). Capture of the endosymbionts was followed by massive translocation of their genes to the genome of the host cell. How genes were transferred from the (prokaryotic) organellar genome to the (eukaryotic) nuclear genome and how the genes became functional in their new eukaryotic genetic environment is largely unknown. Here, we report the successful experimental reconstruction of functional gene transfer between an organelle and the nucleus, a process that normally occurs only on large evolutionary timescales. In consecutive genetic screens, we first transferred a chloroplast genome segment to the nucleus and then selected for gene activation in the nuclear genome. We show that DNA-mediated gene transfer can give rise to functional nuclear genes if followed by suitable rearrangements in the nuclear genome. Acquisition of gene function involves (1) transcriptional activation by capture of the promoter of an upstream nuclear gene and (2) utilization of AT-rich noncoding sequences downstream of the plastid gene as RNA cleavage and polyadenylation sites. Our results reveal the molecular mechanisms of how organellar DNA transferred to the nucleus gives rise to functional genes and reproduce in the laboratory a key process in the evolution of eukaryotic cells.