Long terminal repeat (LTR) retrotransposons and endogenous retroviruses (ERVs) are transposable elements in eukaryotic genomes well suited for computational identification. De novo identification tools determine the position of potential LTR retrotransposon or ERV insertions in genomic sequences. For further analysis, it is desirable to obtain an annotation of the internal structure of such candidates. This article presents LTRdigest, a novel software tool for automated annotation of internal features of putative LTR retrotransposons. It uses local alignment and hidden Markov model-based algorithms to detect retrotransposon-associated protein domains as well as primer binding sites and polypurine tracts. As an example, we used LTRdigest results to identify 88 (near) full-length ERVs in the chromosome 4 sequence of Mus musculus, separating them from truncated insertions and other repeats. Furthermore, we propose a work flow for the use of LTRdigest in de novo LTR retrotransposon classification and perform an exemplary de novo analysis on the Drosophila melanogaster genome as a proof of concept. Using a new method solely based on the annotations generated by LTRdigest, 518 potential LTR retrotransposons were automatically assigned to 62 candidate groups. Representative sequences from 41 of these 62 groups were matched to reference sequences with >80% global sequence similarity.