Since LTR retrotransposons and retroviruses are especially prone to regional duplications and recombination events, these viral-like systems may be especially conducive to the evolution of closely spaced combinatorial regulatory motifs. Using the Drosophila copia LTR retrotransposon as a model, we show that a regulatory region contained within the element's untranslated leader region (ULR) consists of multiple copies of an 8 bp motif (TTGTGAAA) with similarity to the core sequence of the SV40 enhancer. Naturally occurring variation in the number of these motifs is correlated with the enhancer strength of the ULR. Our results indicate that inter-element selection may favor the evolution of more active enhancers within permissive genetic backgrounds. We propose that LTR retroelements and perhaps other retrotransposons constitute drive mechanisms for the evolution of eukaryotic enhancers which can be subsequently distributed throughout host genomes to play a role in regulatory evolution.