Abstract In fungi, the continuous biosynthesis and remodeling of the cell wall are crucial for growth, division, and development. A hallmark of fungal cell walls is their layered structure, which includes several gel-like carbohydrate polymers, such as β-glucans, and a large number of associated cell wall proteins. The fungal-specific family of SUN domain proteins has been implicated in cell wall remodeling and cell separation, but detailed structure-based analyses revealing precise molecular functions have been lacking until now. In this study, we determined high-resolution crystal structures of the SUN domains from two paralogs of the SUN family in budding yeast. We find that their bilobal architecture consists of a sushi-like domain and an intimately associated thaumatin-like domain, which together form a highly conserved canyon fitted to accommodate both single- and triple-helical β-glucan polymers. Within this canyon, we identify twelve conserved polar residues that are crucial for the function of SUN domains in mediating cell separation. We further demonstrate that SUN domains are functionally interchangeable between paralogs in budding yeast, as well as between orthologs from budding yeast and phylogenetically distant fission yeast or filamentous fungi. We conclude that the fungal SUN domain family represents a unique class of β-1,3-glucan-binding proteins involved in cell wall remodeling and separation, whose successful evolution was enabled by the fusion of ancestral sushi- and thaumatin-like domains. Importance Fungal cell walls are dynamic extracellular structures essential for growth and morphogenesis, making them prime targets for antifungal drugs and the host immune system. Although many protein families involved in the synthesis, crosslinking, and degradation of cell wall polymers are known, the molecular functions and structural evolution of most cell wall proteins remain poorly understood. Our in-depth structural, functional, and phylogenetic analysis of the fungal SUN domain protein family sheds light on a central question: how specific protein families have evolved structurally to enable dynamic cell wall remodeling during growth and division. Moreover, this work identifies precise structural targets within the fungal cell wall that could guide the development of novel diagnostics and therapeutics against life-threatening fungal infections.