Syncytins are envelope genes of retroviral origin that have been co-opted for a role in placentation and likely contribute to the remarkable diversity of placental structures. Independent capture events have been identified in primates, rodents, lagomorphs, and carnivores, where they are involved in the formation of a syncytium layer at the fetomaternal interface via trophoblast cell-cell fusion. We searched for similar genes within the suborder Ruminantia where the placenta lacks an extended syncytium layer but displays a heterologous cell-fusion process unique among eutherian mammals. An in silico search for intact envelope genes within the Bos taurus genome identified 18 candidates belonging to five endogenous retrovirus families, with one gene displaying both placenta-specific expression, as assessed by quantitative RT-PCR analyses of a large panel of tissues, and conservation in the Ovis aries genome. Both the bovine and ovine orthologs displayed fusogenic activity by conferring infectivity on retroviral pseudotypes and triggering cell-cell fusion. In situ hybridization of placenta sections revealed specific expression in the trophoblast binucleate cells, consistent with a role in the formation--by heterologous cell fusion with uterine cells--of the trinucleate cells of the cow and the syncytial plaques of the ewe. Finally, we show that this gene, which we named "Syncytin-Rum1," is conserved among 16 representatives of higher ruminants, with evidence for purifying selection and conservation of its fusogenic properties, over 30 millions years of evolution. These data argue for syncytins being a major driving force in the emergence and diversity of the placenta.