Abstract Microsporidia are a group of intracellular parasites with an extremely compact genome and there is no confirmed evidence that retroelements are parasitised in these organisms. Using the dataset of 200,000 genomic shotgun reads of the silkworm pebrine Nosema bombycis, we have identified the eight complete N. bombycis long-terminal repeat retrotransposon ( Nbr) elements. All of the Nbr elements are Ty3/gypsy members and have close relationships to Saccharomycetes long-terminal repeat retrotransposons identified previously, providing further evidence of their relationship to fungi. To explore the effect of retrotransposons in microsporidian genome evolution, their distribution was characterised by comparisons between two N. bombycis contigs containing the Nbr elements with the completed genome of the human parasite Encephalitozoon cuniculi, which is closely related to N. bombycis. The Nbr elements locate between or beside syntenic blocks, which are often clustered with other transposable-like sequences, indicating that they are associated with genome size variation and syntenic discontinuities. The ratios of the number of non-synonymous substitutions per non-synonymous site to the number of synonymous substitutions per synonymous site of the open reading frames among members of each of the eight Nbr families were estimated, which reveal the purifying selection acted on the N. bombycis long-terminal repeat retrotransposons. These results strongly suggest that retrotransposons play a major role in reorganization of the microsporidian genome and they might be active. The present study presents an initial characterization of some transposable elements in the N. bombycis genome and provides some insight into the evolutionary mechanism of microsporidian genomes.