The mammalian placenta exhibits elevated expression of endogenous retroviruses (ERVs), but the evolutionary significance of this feature remains unclear. I propose that ERV‐mediated regulatory evolution was, and continues to be, an important mechanism underlying the evolution of placental development. Many recent studies have focused on the co‐option of ERV‐derived genes for specific functional adaptations in the placenta. However, the co‐option of ERV‐derived regulatory elements could potentially lead to the incorporation of entire gene regulatory networks, which, I argue, would facilitate relatively (...) rapid developmental evolution of the placenta. I suggest a model in which an ancient retroviral infection led to the establishment of the ancestral placental developmental gene network through the co‐option of ERV‐derived regulatory elements. Consequently, placental development would require elevated tolerance to ERV activity. This in turn would expose a continuous stream of novel ERV mutations that may have catalyzed the developmental diversification of the mammalian placenta. (shrink)