Several processes like phenotypic evolution, disease susceptibility and environmental adaptations, which fashion the domestication of animals, are largely attributable to structural variations (SVs) in the genome. Here, we present high-quality draft genomes of the gray wolf (Canis lupus) and dhole (Cuon alpinus) with scaffold N50 of 6.04Mb and 3.96 Mb, respectively. Sequence alignment comprising genomes of three canid species reveals SVs specific to the dog, particularly 16 315 insertions, 2565 deletions, 443 repeats, 16 inversions and 15 translocations. Functional annotation of the dog SVs associated with genes indicates their enrichments in energy metabolisms, neurological processes and immune systems. Interestingly, we identify and verify at population level an insertion fully covering a copy of the AKR1B1 (Aldo-Keto Reductase Family 1 Member B) transcript. Transcriptome analysis reveals a high level of expression of the new AKR1B1 copy in the small intestine and liver, implying an increase in de novo fatty acid synthesis and antioxidant ability in dog compared to gray wolf, likely in response to dietary shifts during the agricultural revolution. For the first time, we report a comprehensive analysis of the evolutionary dynamics of SVs during the domestication step of dogs. Our findings demonstrate that retroposition can birth new genes to facilitate domestication, and affirm the importance of large-scale genomic variants in domestication studies.