The human double-homeodomain retrogene DUX4 is expressed in the testis and epigenetically repressed in somatic tissues. Facioscapulohumeral muscular dystrophy (FSHD) is caused by mutations that decrease the epigenetic repression of DUX4 in somatic tissues and result in mis-expression of this transcription factor in skeletal muscle. DUX4 binds sites in the human genome that contain a double-homeobox sequence motif, including sites in unique regions of the genome as well as many sites in repetitive elements. Using ChIP-seq and RNA-seq on myoblasts transduced with DUX4 we show that DUX4 binds and activates transcription of mammalian apparent LTR-retrotransposons (MaLRs), endogenous retrovirus (ERVL and ERVK) elements, and pericentromeric satellite HSATII sequences. Some DUX4-activated MaLR and ERV elements create novel promoters for genes, long non-coding RNAs, and antisense transcripts. Many of these novel transcripts are expressed in FSHD muscle cells but not control cells, and thus might contribute to FSHD pathology. For example, HEY1, a repressor of myogenesis, is activated by DUX4 through a MaLR promoter. DUX4-bound motifs, including those in repetitive elements, show evolutionary conservation and some repeat-initiated transcripts are expressed in healthy testis, the normal expression site of DUX4, but more rarely in other somatic tissues. Testis expression patterns are known to have evolved rapidly in mammals, but the mechanisms behind this rapid change have not yet been identified: our results suggest that mobilization of MaLR and ERV elements during mammalian evolution altered germline gene expression patterns through transcriptional activation by DUX4. Our findings demonstrate a role for DUX4 and repetitive elements in mammalian germline evolution and in FSHD muscular dystrophy.