Retroviruses have left their legacy in host genomes over millions of years as endogenous retroviruses (ERVs), and their structure, diversity, and prevalence provide insights into the historical dynamics of retrovirus-host interactions. In bioinformatic analyses of koala (Phascolarctos cinereus) whole-genome sequences, we identify a recently expanded ERV lineage (phaCin-β) that is related to the New World squirrel monkey retrovirus. This ERV expansion shares many parallels with the ongoing koala retrovirus (KoRV) invasion of the koala genome, including highly similar and mostly intact sequences, and polymorphic ERV loci in the sampled koala population. The recent phaCin-β ERV colonization of the koala genome appears to predate the current KoRV invasion, but polymorphic ERVs and divergence comparisons between these two lineages predict a currently uncharacterized, possibly still extant, phaCin-β retrovirus. The genomics approach to ERV-guided discovery of novel retroviruses in host species provides a strong incentive to search for phaCin-β retroviruses in the Australasian fauna.