Gene duplications are a hallmark of plant genome evolution and a foundation for genetic interactions that shape phenotypic diversity Compensation is a major form of paralogue interaction but how compensation relationships change as allelic variation accumulates is unknown. Here we leveraged genomics and genome editing across the Solanaceae family to capture the evolution of compensating paralogues. Mutations in the stem cell regulator CLV3 cause floral organs to overproliferate in many plants In tomato, this phenotype is partially suppressed by transcriptional upregulation of a closely related paralogue. Tobacco lost this paralogue, resulting in no compensation and extreme clv3 phenotypes. Strikingly, the paralogues of petunia and groundcherry nearly completely suppress clv3, indicating a potent ancestral state of compensation. Cross-species transgenic complementation analyses show that this potent compensation partially degenerated in tomato due to a single amino acid change in the paralogue and cis-regulatory variation that limits its transcriptional upregulation. Our findings show how genetic interactions are remodelled following duplications and suggest that dynamic paralogue evolution is widespread over short time scales and impacts phenotypic variation from natural and engineered mutations.