A major portion of the human genome appears to be of retroviral origin. These endogenous retroviral elements are expressed in a variety of normal tissues and during disease states, such as autoimmune and malignant conditions. Recently, potential roles have been described for endogenous retroviral envelope proteins in normal differentiation of human villous cytotrophoblast into syncytiotrophoblast. This article provides a brief critical review of the current state of knowledge concerning the expression of the env regions of three endogenous retroviral elements: ERV-3, HERV-W, and HERV-FRD. A testable model of villous cytotrophoblast differentiation is constructed, in which a complementary expression of endogenous retroviral envelope proteins initiates hCG production, decreased cell proliferation, and intercellular fusion.