Alterations in tissue-specific gene expression greatly affect cell function. Transcription factors (TFs) interact with cis-acting binding sites in noncoding enhancer promoter regions. Transposable elements (TEs) are abundant and similarly represented among mammalian genomes. TEs are important in gene regulation, but their function is not well understood. We have characterized a TE containing functional TF-binding sites for the carcinogen-activated dioxin receptor xenobiotic responsive element (XRE) and the epithelial-mesenchymal transition regulator Slug (Slug site). A Mus promoter database was scanned for XREs to predict coregulation with other TFs. We identified an overrepresented (1,398 genes) B1 retrotransposon containing XRE and Slug sites within 35 bp of each other (designated as B1-X35S). This B1-X35S retrotransposon differed from classic B1s by the presence of the Slug site and by its differential nucleotide conservation outside the X35S region. Phylogenetically, B1-X35S appeared recently in evolution, close to the B1-B subfamily. Comparative gene expression in 61 mouse tissues revealed that B1-X35S-containing genes had lower median expression levels than those with canonical B1 TEs, suggesting a repressive role for X35S. Indeed, X35S was functional and able to bind aryl hydrocarbon (dioxin) receptor (AhR) and Slug and, importantly, to repress cis-reporter genes. Moreover, AhR and Slug were recruited to X35S in vivo and repressed the endogenous expression of X35S-containing genes. Our results demonstrate the existence of a widely present B1 subfamily in the mouse. Because AhR and Slug are relevant in tumor development and differentiation, X35S may represent a genome-wide regulatory mechanism and a tool to modulate gene expression.