The retroviral capacity for integration into the host genome can give rise to endogenous retroviruses (ERVs): retroviral sequences that are transmitted vertically as part of the host germ line, within which they may continue to replicate and evolve. ERVs represent both a unique archive of ancient viral sequence information and a dynamic component of host genomes. As such they hold great potential as informative markers for studies of both virus evolution and host genome evolution. Numerous novel ERVs have been described in recent years, particularly as genome sequencing projects have advanced. This review discusses the evolution of ERV lineages, considering the processes by which ERV distribution and diversity is generated. The diversity of ERVs isolated so far is summarised in terms of both their distribution across host taxa, and their relationships to recognised retroviral genera. Finally the relevance of ERVs to studies of genome evolution, host disease and viral ecology is considered, and recent findings discussed.