Transcription of retrotransposons is usually repressed by DNA methylation, but a few elements, such as intracisternal A-particles (IAPs) associated with the Agouti and Axin-fused loci, partially escape this repression mechanism. The levels of this repression are also variable among individuals with an identical genome sequence, generating epigenetically different states of loci or 'epialleles.' In the current study, we tested the existence of additional retrotransposon-derived epialleles in the mouse genome. Using a series of bioinformatic approaches, 143 candidate epialleles were first identified from the mouse genome based on their promoter activity and association with active histone modification marks. Detailed analyses suggest that a subset of these elements showed variable levels of DNA methylation among the individual mice of an isogenic background, revealing their stochastic nature (metastability) of DNA methylation. The analyses also identified two opposite patterns of DNA methylation during development, progressive gaining vs. losing, confirming the dynamic nature of their DNA methylation patterns. qRT-PCR analyses demonstrated that the expression levels of these elements are indeed variable among the individual mice, suggesting functional consequences on their associated endogenous genes. Overall, these data confirm the presence of a number of new retrotransposon-derived epialleles with suggestions of the presence of more, and further identify retrotransposons as a major source of epigenetic variations in the mammalian genome.