Retroviruses infect a broad range of vertebrate hosts that includes amphibians, reptiles, fish, birds and mammals. In addition, a typical vertebrate genome contains thousands of loci composed of ancient retroviral sequences known as endogenous retroviruses (ERVs). ERVs are molecular remnants of ancient retroviruses and proof that the ongoing relationship between retroviruses and their vertebrate hosts began hundreds of millions of years ago. The long-term impact of retroviruses on vertebrate evolution is twofold: first, as with other viruses, retroviruses act as agents of selection, driving the evolution of host genes that block viral infection or that mitigate pathogenesis, and second, through the phenomenon of endogenization, retroviruses contribute an abundance of genetic novelty to host genomes, including unique protein-coding genes and cis-acting regulatory elements. This Review describes ERV origins, their diversity and their relationships to retroviruses and discusses the potential for ERVs to reveal virus-host interactions on evolutionary timescales. It also describes some of the many examples of cellular functions, including protein-coding genes and regulatory elements, that have evolved from ERVs.