Endogenous retroviruses (ERVs) are present in the genome of all vertebrates and are remnants of ancient exogenous retroviral infections of the host germline transmitted vertically from generation to generation. Syncytins are envelope (env) genes of retroviral origin that have been co-opted by the host to mediate placental development. Two syncytin genes have been identified in primates (HERV-W (ERVWE1) termed syncytin-1 and HERV-FRD termed syncytin-2), as well as distinct, nonorthologous genes in rodents (syncytin-A and -B) and rabbits (syncytin-Ory1). The syncytins can induce cell-cell fusion, and placental development in those mammals requires the fusion of trophoblast cells into a highly specialized, multinucleated syncytiotrophoblast layer, which is essential for absorption of nutrients from the mother. All of the syncytins are expressed in the syncytiotrophoblasts, and null mutation of the syncytin-A gene in mice results in disruption of the syncytiotrophoblast-containing labyrinth placenta. The null placentae exhibit decreased vascularization and poor transport, resulting in fetal growth retardation and ultimately embryo loss between 11.5 and 13.5 days of gestation. In both humans and mice, one of the two syncytins (human syncytin-2 and mouse syncytin-B) is also immunosuppressive, suggesting they may be also involved in immunotolerance of the semiallogeneic fetus. The sheep genome contains 27 JSRV-related endogenous betaretroviruses (enJSRVs) related to the pathogenic Jaagsiekte sheep retrovirus (JSRV) that have been integrating in the host genome for the last 5-7 million years. The exogenous JSRV is a causative agent of a transmissible lung cancer in sheep, and enJSRVs are able to protect their host against JSRV infection by blocking different steps of the viral replication cycle via receptor interference and late replication steps. Indeed, endogenization and positive selection of ERVs acting as restriction factors is a mechanism used by the host to fight exogenous retroviral infections. In sheep, the enJSRVs are most abundantly expressed in the uterine luminal and glandular epithelia as well as in the conceptus (embryo and associated extraembryonic membranes) trophectoderm. Sixteen of the 27 enJSRV loci contain an env gene with an intact open reading frame, and in utero loss-of-function experiments found the enJSRVs envelope (env) to be essential for conceptus elongation and trophoblast growth and differentiation. Collectively, available evidence supports the ideas that genes captured from ancestral retroviruses have been pivotal in the acquisition of new, important functions in mammalian evolution and were positively selected for biological roles in genome plasticity, protection of the host against infection of related pathogenic and exogenous retroviruses, and placental morphogenesis. This work supported by NIH Grant HD052745 and by a Strategic Research Developmental Grant by the Scottish Funding Council. (platform)