Retroviral replication involves the formation of a DNA provirus integrated into the host genome. Through this process, retroviruses can colonize the germ line to form endogenous retroviruses (ERVs). ERV inheritance can have multiple adverse consequences for the host, some resembling those resulting from exogenous retrovirus infection but others arising by mechanisms unique to ERVs. Inherited retroviruses can also confer benefits on the host. To meet the different threats posed by endogenous and exogenous retroviruses, various host defences have arisen during evolution, acting at various stages on the retrovirus life cycle. In this Review, I describe our current understanding of the distribution and architecture of ERVs, the consequences of their acquisition for the host and the emerging details of the intimate evolutionary relationship between virus and vertebrate host.