The emergence of new genes throughout evolution requires rewiring and extension of regulatory networks. However, the molecular details of how the transcriptional regulation of new gene copies evolves remain largely unexplored. Here we show how duplication of a transcription factor gene allowed the emergence of two independent regulatory circuits. Interestingly, the ancestral transcription factor was promiscuous and could bind different motifs in its target promoters. After duplication, one paralogue evolved increased binding specificity so that it only binds one type of motif, whereas the other copy evolved a decreased activity so that it only activates promoters that contain multiple binding sites. Interestingly, only a few mutations in both the DNA-binding domains and in the promoter binding sites were required to gradually disentangle the two networks. These results reveal how duplication of a promiscuous transcription factor followed by concerted cis and trans mutations allows expansion of a regulatory network.