Kinetic stability is thought to be an attribute of proteins that require a long lifetime, such as the transporter of thyroxine and holo retinol-binding protein or transthyretin (TTR) functioning in the bloodstream, cerebrospinal fluid, and vitreous humor. TTR evolved from ancestral enzymes known as TTR-related proteins (TRPs). Here, we develop a rate-expansion approach that allows unfolding rates to be measured directly at low denaturant concentration, revealing that kinetic stability exists in the Escherichia coli TRP (EcTRP), even though the enzyme structure is more energetically frustrated and has a more mutation-sensitive folding mechanism than human TTR. Thus, the ancient tetrameric enzyme may already have been poised to mutate into a kinetically stable human transporter. An extensive mutational study that exchanges residues at key sites within the TTR and EcTRP dimer-dimer interface shows that tyrosine 111, replaced by a threonine in TTR, is the gatekeeper of frustration in EcTRP because it is critical for function. Frustration, virtually absent in TTR, occurs at multiple sites in EcTRP and even cooperatively for certain pairs of mutations. We present evidence that evolution at the C terminus of TTR was a compensatory event to maintain the preexisting kinetic stability while reducing frustration and sensitivity to mutation. We propose an "overcompensation" pathway from EcTRPs to functional hybrids to modern TTRs that is consistent with the biophysics discussed here. An alternative plausible pathway is also presented.