The RHS (rearrangement hotspot) protein family are ubiquitous throughout bacteria where they primarily function as toxins. They are defined by a 15 amino acid consensus sequence that adopts a β-hairpin fold known as the YD repeat. Multiple YD repeats can be tandemly arranged into a spiraling, cage-like superstructure with a hollow lumen to encapsulate a protein cargo, usually encoded at the C terminus of the protein. The lumen forms a separate microenvironment which keeps the encapsulated cargo (many of which are toxic proteins) in an unfolded or partially unfolded state, with self-cleavage mechanisms facilitating its release. To understand the functional diversity of RHS proteins, we identified and structurally charaterised various RHS proteins found in different functional contexts. We previously determined crystal structures of the TcB-TcC complex from the ABC toxin of the soil dwelling bacterium Yersinia entomophaga, providing the first structural example of a YD repeat containing protein. Here, we determined the 2.9 Å cryo-EM structure of RhsA, a putative virulence effector from E. coli resembling Type VI secretion system associated effectors, and the 3.7 Å cryo-EM structure of a bacterial homologue of eukaryotic teneurins (Teneurin-like-protein, TLP). Both reveal cage-like architecture with similar encapsulation mechanism of the C-terminal encoded effector. As in TcB-TcC, an aspartyl protease mediated self-cleavage mechanism facilitates effector release. However, N terminal region cleavage was also observed through an as-yet identified mechanism. Our observations that both RhsA and TLP function as toxins, suggests that eukaryotic teneurins likely evolved signalling functions following transfer of ancient TLP homologues from bacteria. Finally, the identification of a clade of YD repeat containing proteins that are enriched in the salivary and venom glands of insects provides evidence of diverse mechanisms of cellular targeting in protein function. Collectively, our results demonstrate that RHS proteins have evolved to perform a variety of cellular functions that involve packaging of bioactive molecules, and that cargo localisation can be facilitated via several different mechanisms. Our analysis has also provided a framework for understanding YD repeat-based encapsulation and provides a foundation for the rational design of bespoke RHS cages which have potential biotechnological and biomedical applications.