Long terminal repeat (LTR) retrotransposons are the major class I mobile elements in plants. They play crucial roles in gene expansion, diversification and evolution. However, their captured genes are yet to be genome-widely identified and characterized in most of plants although many genomes have been completely sequenced. In this study, we have identified 7,043 and 23,915 full-length LTR retrotransposons in the rice and sorghum genomes, respectively. High percentages of rice full-length LTR retrotransposons were distributed near centromeric region in each of the chromosomes. In contrast, sorghum full-length LTR retrotransposons were not enriched in centromere regions. This dissimilarity could be due to the discrepant retrotransposition during and after divergence from their common ancestor thus might be contributing to species divergence. A total of 672 and 1,343 genes have been captured by these elements in rice and sorghum, respectively. Gene Ontology (GO) and gene set enrichment analysis (GSEA) showed that no over-represented GO term was identified in LTR captured rice genes. For LTR captured sorghum genes, GO terms with functions in DNA/RNA metabolism and chromatin organization were over-represented. Only 36% of LTR captured rice genes were expressed and expression divergence was estimated as 11.9%. Higher percentage of LTR captured rice genes have evolved into pseudogenes under neutral selection. On the contrary, higher percentage of LTR captured sorghum genes were under purifying selection and 72.4% of them were expressed. Thus, higher percentage of LTR captured sorghum genes was functional. Small RNA analysis suggested that some of LTR captured genes in rice and sorghum might have been involved in negative regulation. On the other hand, positive selection has been observed in both rice and sorghum LTR captured genes and some of them were still expressed and functional. The data suggest that some of these LTR captured genes might have evolved into new gene functions.