SignificanceEndogenous retroviruses (ERVs) are proviral sequences that result from host germ-line invasion by exogenous retroviruses. The majority of ERVs are degraded. Using the koala retrovirus (KoRV) as a model system, we demonstrate that recombination with an ancient koala retroelement disables KoRV, and that recombination occurs frequently and early in the invasion process. Recombinant KoRVs (recKoRVs) are then able to proliferate in the koala germ line. This may in part explain the generally degraded nature of ERVs in vertebrate genomes and suggests that degradation via recombination is one of the earliest processes shaping retroviral genomic invasions.