The bacterial genomes of Thermotoga species show evidence of significant interdomain horizontal gene transfer from the Archaea. Members of this genus acquired many genes from the Thermococcales, which grow at higher temperatures than Thermotoga species. In order to study the functional history of an interdomain horizontally acquired gene we used ancestral sequence reconstruction to examine the thermal characteristics of reconstructed ancestral proteins of the Thermotoga lineage and its archaeal donors. Several ancestral sequence reconstruction methods were used to determine the possible sequences of the ancestral Thermotoga and Archaea myo-inositol-3-phosphate synthase (MIPS). These sequences were predicted to be more thermostable than the extant proteins using an established sequence composition method. We verified these computational predictions by measuring the activities and thermostabilities of purified proteins from the Thermotoga and the Thermococcales species, and eight ancestral reconstructed proteins. We found that the ancestral proteins from both the archaeal donor and the Thermotoga most recent common ancestor recipient were more thermostable than their descendants. We show that there is a correlation between the thermostability of MIPS protein and the optimal growth temperature (OGT) of its host, which suggests that the OGT of the ancestors of these species of Archaea and the Thermotoga grew at higher OGTs than their descendants.