A family of at least eleven genes called Mar related to long terminal repeat retrotransposons from the Ty3/gypsy group, including two genes previously identified as such, is present in human and mouse genomes. Single orthologous copies were identified for most Mar genes in different mammals. All of them have lost essential structural features necessary for autonomous retrotransposition before divergence between mouse and human. Three Mar genes also have introns at identical positions in human and mouse. Hence, Mar genes do not correspond to functional retrotransposons. Mar genes evolved under purifying selection, strongly suggesting that they are not pseudogenic relics but rather neofunctionalized retrotransposon genes. All putative Mar proteins display sequence similarity to the capsid-like domain of the Gag protein of Tf1/Sushi retrotransposons. In addition, three Mar proteins have conserved the Gag CCHC zinc finger motif, suggesting a role in nucleic acid binding. Some Mar genes have also retained from their retrotransposon origin a -1 ribosomal frameshifting between the gag-related open reading frame and a region encoding a putative aspartyl protease domain. EST analysis revealed that the majority of Mar genes are expressed in brain as well as in other tissues and organs. Some Mar proteins might function as transcription factors or be involved in the control of cell proliferation and apoptosis. Strikingly, as many as eight Mar genes are located on the X chromosome in human, mouse and other mammals, and at least two of the autosomal genes are subject to imprinting. We suggest that retrotransposons might be a source for epigenetically regulated genes. Epigenetic regulation of these neogenes might be derived from the cellular defense mechanisms having controlled their retrotransposon ancestor.