Paleovirology, the study of viruses on evolutionary timescales, can exploit information from endogenous viral elements (EVEs), which are the result of heritable horizontal gene transfer (HGT) from viruses to hosts. The availability of genomic data has increased opportunities to study EVEs, and bioinformatics techniques have been crucial in cataloguing EVE diversity and taxonomic coverage. Recent advances show that some EVEs have been co-opted as cellular genes, often as inhibitors of viral infection. These genes are an intriguing strategy in virus-host evolutionary battles in that genetic material is transferred from virus to host, and then used by the host against the virus. In this review, we consider the genes and processes involved in EVE-derived immunity (EDI), assess factors leading to its emergence, and outline how future work will benefit from incorporating evolutionary approaches.