The third-round whole genome duplication (3R-WGD) event occurred in the stem lineage of teleost during evolution, and is considered to be responsible for the biological diversification of ray-finned fishes. TUDOR domain containing protein 7 (Tdrd7), which belongs to the Tudor family proteins has been widely discussed in mammals. However, information about this gene in teleost is still lacking. In this study, two teleost tdrd7 genes (tdrd7a and tdrd7b) were identified in the transcriptome of Japanese flounder (Paralichthys olivaceus). Through genomic structure, phylogenetic, synteny analysis and online bioinformatic mining of tdrd7 duplications in other selected species, we confirmed that tdrd7a/7b were originated from the teleost-specific 3R-WGD. The tdrd7a is specific to teleost except for spotted gar. The tdrd7a showed a higher molecular evolution rate than tdrd7b with longer branch-length in the phylogenetic tree and multiple positively selected sites. Interestingly, it showed gonad specific expression pattern in adult tissues and germ cell specific distribution in embryos and gonads. Its 3'-untranslated region (3'UTR) labeled eGFP/DsRED could visualize primordial germ cells (PGCs) in zebrafish embryos. The tdrd7b did not show similar tissue and cell type specificity. These characteristic differences between the duplicated tdrd7 paralogues suggest that tdrd7a and tdrd7b have undergone neofunctionalization in Japanese flounder. Our results provide novel insight into the evolution and functional diversification of teleost tdrd7 genes deserving further investigations.