Ty3/gypsy retrotransposons are rare in mammalian genomes despite their abundance in invertebrate and other vertebrate classes. Here we identify a family of nine conserved mammalian genes with homology to Ty3/gypsy retrotransposons but which have lost their ability to autonomously retrotranspose. Of these, five map to the X chromosome while the remaining four are autosomal. Comparative phylogenetic analyses show them to have strongest homology to the sushi-ichi element from Fugu rubripes. Two of the autosomal gene members, Peg10 and Rtl1, are known to be imprinted, being expressed from the paternally inherited chromosome homologue. This suggests, consistent with the host-parasite response theory of the evolution of the imprinting mechanism, that parental-origin specific epigenetic control may be mediated by genomic "parasitic" elements such as these. Alternatively, these elements may preferentially integrate into regions that are differentially modified on the two homologous chromosomes such as imprinted domains and the X chromosome and acquire monoallelic expression. We assess the imprinting status of the remaining autosomal members of this family and show them to be biallelically expressed in embryo and placenta. Furthermore, the methylation status of Rtl1 was assayed throughout development and was found to resemble that of actively, silenced repetitive elements rather than imprinted sequences. This indicates that the ability to undergo genomic imprinting is not an inherent property of all members of this family of retroelements. Nonetheless, the conservation but functional divergence between the different members suggests that they have undergone positive selection and acquired distinct endogenous functions within their mammalian hosts.