Abstract Retroviruses are an ancient viral family that have globally coevolved with vertebrates and impacted their evolution. In Australia, a continent that has been geographically isolated for millions of years, little is known about retroviruses in wildlife, despite the devastating impacts of a retrovirus on endangered koala populations. We therefore sought to identify and characterize Australian retroviruses through reconstruction of endogenous retroviruses from marsupial genomes, in particular the Tasmanian devil due to its high cancer incidence. We screened 19 marsupial genomes and identified over 80,000 endogenous retrovirus fragments which we classified into eight retrovirus clades. The retroviruses were similar to either Betaretrovirus (5/8) or Gammaretrovirus (3/8) retroviruses, but formed distinct phylogenetic clades compared to extant retroviruses. One of the clades (MEBrv 3) lost an envelope but retained retrotranspositional activity, subsequently amplifying throughout all Dasyuridae genomes. Overall, we provide insights into Australian retrovirus evolution and identify a highly active endogenous retrovirus within Dasyuridae genomes.