Allopolyploidization is recurrent across the tree of angiosperms and known as a driving evolutionary force in both plants and animals. A salient feature of allopolyploidization is the induction of homoeologous exchange (HE) events between the constituent subgenomes, which may in turn cause changes in gene expression, transcript alternative splicing, and phenotypic novelty. However, this issue has been poorly studied, largely because lack of a system in which the exact parentage donating the subgenomes is known and the HE events are occurring in real time. Here, we employed whole-genome re-sequencing and RNA-seq-based transcriptome profiling in four randomly chosen progeny individuals (at the 10th-selfed generation) of segmental allotetraploids that were constructed by colchicine-mediated whole-genome doubling of F1 hybrids between the two subspecies (japonica and indica) of Asian cultivated Oryza sativa. We show that rampant HE events occurred in these tetraploid individuals, which converted most of the otherwise heterozygous genomic regions into a homogenized state of one parental subgenome. We demonstrate that genes within these homogenized genomic regions in the tetraploids showed high frequencies of altered expression and enhanced alternative splicing relative to their counterparts in the corresponding diploid parents in the embryo tissue. Intriguingly, limited overlaps between the differentially expressed genes and the differential alternative spliced genes were identified, which were partitioned to distinctly enriched gene ontology terms. Together, our results indicate that HE is a major mechanism to rapidly generate novelty in gene expression and transcriptome diversity, which may facilitate phenotypic innovation in nascent allopolyploids and relevant to allopolyploid crop breeding.