Human L1 elements are non-LTR retrotransposons that comprise approximately 17% of the human genome. Their 5'-untranslated region (5'-UTR) serves as a promoter for L1 transcription. Now we find that transcription initiation sites are not restricted to nucleotide +1 but vary considerably in both downstream and upstream directions. Transcription initiating upstream explains additional nucleotides often seen between the 5'-target site duplication and the L1 start site. A higher frequency of G nucleotides observed upstream from the L1 can be explained by reverse transcription of the L1 RNA 5'-CAP, which is further supported by extra Gs seen for full-length HERV-W pseudogenes. We assayed 5'-UTR promoter activities for several full-length human L1 elements, and found that upstream flanking cellular sequences strongly influence the L1 5'-UTR promoter. These sequences either repress or enhance the L1 promoter activity. Therefore, the evolutionary success of a human L1 in producing progeny depends not only on the L1 itself, but also on its genomic integration site. The promoter mechanism of L1 is reminiscent of initiator (Inr) elements that are TATA-less promoters expressing several cellular genes. We suggest that the L1 5'-UTR is able to form an Inr element that reaches into upstream flanking sequence.