Retroviruses and retrotransposons both insert copies of their genetic elements into the genome of the host cell. Thus, the viral genes are passed on when the host genome is replicated or translated. A typical retroviral DNA sequence contains 3-4 genes that encode the different proteins required for its structural assembly and function as a molecular parasite. This DNA is transcribed into a single mRNA, which is very similar in structure to conventional mRNAs, i.e., it is capped at the 5’ terminal and has a polyadenylated 3’ end. Thus, the host cell’s ribosome translates the retroviral mRNA into a single chain of polyproteins. Some retroviruses use virus-encoded proteases to process this single chain into the proteins required for virion assembly. The retroviral mRNA is then packaged into a core with gag proteins, encapsulated by capsid proteins. For the release of the virus from the cell, a part of the host cell membrane's lipid bilayer is pinched off to form the outer shell of the virus. The assembled virus particle is then released to carry on the cycle of infection.

The transposition-like events in the life cycle of retroviruses are not coincidental. Present-day retroviruses are proposed to have evolved from the foamy virus, an ancient line of retroviruses that lived in the ocean. Vertebrates such as fish contained retrotransposons of genes encoding envelope proteins that captured the foamy viruses.

The close relationship between retrotransposons and retroviruses exist even today. The main distinguishing factor between the two is that although retrotransposons can form capsid proteins, they cannot synthesize viral envelopes. Therefore, no mature virus particles are formed, and the retrotransposons cannot be horizontally transferred from one cell to another.

Sequencing the human genome has revealed that 8% of the human genome contains retroviral elements, though they are in a latent state. These elements are considered to be “fossils” of ancient retroviruses and are immensely helpful in understanding not only viral but vertebral evolution as well.