Abstract Retrotransposons are the evolution relic of ancestrally invaded retroviruses interspersed through our genome. Mostly domesticated as host regulome, retrotransposons shape lineage gene expressions or donate coding functions. A few rare evolutionarily young species remain virally active, leading to germline mutations and modulating immune functions. Aberrant retrotransposon activities have been widely observed in adult diseases, although the extent to which they ensue active viral form and function under those contexts is unclear. Their molecular trigger in adult pathophysiology is poorly defined. To address these questions, we use murine skin as our model, given its well-characterized, abundant and highly accessible adult stem cells, not only mediating postnatal remodeling and homeostatic regeneration, but also responding to stress by driving tissue repair and adaptations. By analyzing a genetic model lacking a known retrotransposon suppressor, histone methyltransferase Setdb1, which we found to be essential in the adult skin, we saw hair loss and hair follicle stem cell exhaustion phenotype, accompanied by a robust and selective surge of endogenous retroviruses (ERVs). When combined with squamous cell carcinoma drivers, Setdb1 loss significantly blocked tumor progression in vivo. Interestingly, compared to relatively mild or no induction of commonly observed evolutionarily young ERVs, the most induced species in our model is a class I ERV, murine leukemia virus (MuLV). We detected abundant retroviral peptides originated from its full-length copies through mass spectrometry and viral-like particles through transmission electron microscopy that are immunoreactive to a monoclonal MuLV env antibody. Similar viral-like particles were broadly evident across several epithelial tissues beyond skin, implicating its conserved function across squamous cancers. Epithelial originated ERVs elicit tissue wide inflammatory response, and can be ameliorated by pharmacological or genetic inhibition of retroviral activity. Physiologically, viral-coding ERVs arise as the epigenetic machinery declines in response to age-associated stress, and plummet when host safeguard prevails in UV induced skin hyperplasia. As an evolutionary conundrum, viral-coding ERVs pose a threat to host fitness and yet, they’ve resisted extinction persisting in the mammalian genome. Our findings suggest viral-coding ERVs wrestle with the host surveillance programs to regulate adult tissue physiology and pathology, thus providing a key target in eliciting innate immunity and tackling squamous cancers. Citation Format: Ying Lyu, Yejing Ge. Exploiting the pathogenesis of endogenous retrovirus to tackle squamous cancers [abstract]. In: Proceedings of the American Association for Cancer Research Annual Meeting 2024; Part 1 (Regular Abstracts); 2024 Apr 5-10; San Diego, CA. Philadelphia (PA): AACR; Cancer Res 2024;84(6_Suppl):Abstract nr 1244.