This paper presents and discusses evidence suggesting how the diversity of domain folds in existence today might have evolved from peptide ancestors. We apply a structure similarity detection method to detect instances where localized regions of different protein folds contain highly similar sequences and structures. Results of performing an all-on-all comparison of known structures are described and compared with other recently published findings. The numerous instances of local sequence and structure similarities within different protein folds, together with evidence from proteins containing sequence and structure repeats, argues in favor of the evolution of modern single polypeptide domains from ancient short peptide ancestors (antecedent domain segments (ADSs)). In this-model, ancient protein structures were formed by self-assembling aggregates of short polypeptides. Subsequently, and perhaps concomitantly with the evolution of higher fidelity DNA replication and repair systems, single polypeptide domains arose from the fusion of ADSs. genes. Thus modern protein domains may have a polyphyletic origin.