Endogenous retroviruses (ERVs) are present in the genome of all vertebrates and are remnants of ancient exogenous retroviral infections of the host germline transmitted vertically from generation to generation. Sheep betaretroviruses offer a unique model system to study the complex interaction between retroviruses and their host. The sheep genome contains 27 endogenous betaretroviruses (enJSRVs) related to the exogenous and pathogenic Jaagsiekte sheep retrovirus (JSRV), the causative agent of a transmissible lung cancer in sheep. The enJSRVs can protect their host against JSRV infection by blocking early and late steps of the JSRV replication cycle. In the female reproductive tract, enJSRVs are specifically expressed in the uterine luminal and glandular epithelia as well as in the conceptus (embryo and associated extraembryonic membranes) trophectoderm and in utero loss-of-function experiments found the enJSRVs envelope (env) to be essential for conceptus elongation and trophectoderm growth and development. Collectively, available evidence in sheep and other mammals indicate that ERVs coevolved with their hosts for millions of years and were positively selected for biological roles in genome plasticity and evolution, protection of the host against infection of related pathogenic and exogenous retroviruses, and placental development.