Gene duplication is important in evolution, because it provides new raw material for evolutionary adaptations. Several existing hypotheses about the causes of duplicate retention and diversification differ in their emphasis on gene dosage, subfunctionalization, and neofunctionalization. Little experimental data exist on the relative importance of gene expression changes and changes in coding regions for the evolution of duplicate genes. Furthermore, we do not know how strongly the environment could affect this importance. To address these questions, we performed evolution experiments with the TEM-1 beta lactamase gene in Escherichia coli to study the initial stages of duplicate gene evolution in the laboratory. We mimicked tandem duplication by inserting two copies of the TEM-1 gene on the same plasmid. We then subjected these copies to repeated cycles of mutagenesis and selection in various environments that contained antibiotics in different combinations and concentrations. Our experiments showed that gene dosage is the most important factor in the initial stages of duplicate gene evolution, and overshadows the importance of point mutations in the coding region.