Abstract A diverse range of DNA sequences derived from circoviruses (family Circoviridae) have been identified in samples obtained from humans and domestic animals, often in association with pathological conditions. In the majority of cases, however, little is known about the natural biology of the viruses from which these sequences are derived. Endogenous circoviral elements (CVe) are DNA sequences derived from circoviruses that occur in animal genomes and provide a useful source of information about circovirus-host relationships. In this study we screened genome assemblies of 675 animal species and identified numerous circovirus-related sequences, including the first examples of CVe derived from cycloviruses. We confirmed the presence of these CVe in the germline of the elongate twig ant ( Pseudomyrmex gracilis ), thereby establishing that cycloviruses infect insects. We examined the evolutionary relationships between CVe and contemporary circoviruses, showing that CVe from ants and mites group relatively closely with cycloviruses in phylogenies. Furthermore, the relatively random interspersal of CVe from insect genomes with cyclovirus sequences recovered from vertebrate samples, suggested that contamination might be an important consideration in studies reporting these viruses. Our study demonstrates how endogenous viral sequences can inform metagenomics-based virus discovery. In addition, it raises doubts about the role of cycloviruses as pathogens of humans and other vertebrates.