Ionotropic glutamate receptors (iGluRs) are a highly conserved family of ligand-gated ion channels present in animals, plants, and bacteria, which are best characterized for their roles in synaptic communication in vertebrate nervous systems. A variant subfamily of iGluRs, the Ionotropic Receptors (IRs), was recently identified as a new class of olfactory receptors in the fruit fly, Drosophila melanogaster, hinting at a broader function of this ion channel family in detection of environmental, as well as intercellular, chemical signals. Here, we investigate the origin and evolution of IRs by comprehensive evolutionary genomics and in situ expression analysis. In marked contrast to the insect-specific Odorant Receptor family, we show that IRs are expressed in olfactory organs across Protostomia—a major branch of the animal kingdom that encompasses arthropods, nematodes, and molluscs—indicating that they represent an ancestral protostome chemosensory receptor family. Two subfamilies of IRs are distinguished: conserved “antennal IRs,” which likely define the first olfactory receptor family of insects, and species-specific “divergent IRs,” which are expressed in peripheral and internal gustatory neurons, implicating this family in taste and food assessment. Comparative analysis of drosophilid IRs reveals the selective forces that have shaped the repertoires in flies with distinct chemosensory preferences. Examination of IR gene structure and genomic distribution suggests both non-allelic homologous recombination and retroposition contributed to the expansion of this multigene family. Together, these findings lay a foundation for functional analysis of these receptors in both neurobiological and evolutionary studies. Furthermore, this work identifies novel targets for manipulating chemosensory-driven behaviours of agricultural pests and disease vectors.