Teleost fishes comprise approximately half of all living vertebrates. The extreme range of diversity in teleosts is remarkable, especially, extensive morphological variation in their jaws and dentition. Some of the most unusual dentitions are found among members of the highly derived teleost order Tetraodontiformes, which includes triggerfishes, boxfishes, ocean sunfishes, and pufferfishes. Adult pufferfishes (Tetraodontidae) exhibit a distinctive parrot-like beaked jaw, forming a cutting edge, unlike in any other group of teleosts. Here we show that despite novelty in the structure and development of this “beak,” it is initiated by formation of separate first-generation teeth that line the embryonic pufferfish jaw, with timing of development and gene expression patterns conserved from the last common ancestor of osteichthyans. Most of these first-generation larval teeth are lost in development. Continuous tooth replacement proceeds in only four parasymphyseal teeth, as sequentially stacked, multigenerational, jaw-length dentine bands, before development of the functional beak. These data suggest that dental novelties, such as the pufferfish beak, can develop later in ontogeny through modified continuous tooth addition and replacement. We conclude that even highly derived morphological structures like the pufferfish beak form via a conserved developmental bauplan capable of modification during ontogeny by subtle respecification of the developmental module.