Retroviruses are commonly considered to be restricted to vertebrates. However, the genome of many eukaryotes contains mobile sequences known as retrotransposons with long terminal repeats (LTR retrotransposons) or viral retrotransposons, showing similarities with integrated proviruses of retroviruses, such as Ty elements in Saccharomyces cerevisiae, copia-like elements in Drosophila, and endogenous proviruses in vertebrates. The gypsy element of Drosophila melanogaster has LTRs and contains three open reading frames, one of which encodes potential products similar to gag-specific protease, reverse transcriptase, and endonuclease. It is more similar to typical retroviruses than to LTR retrotransposons. We report here experiments showing that gypsy can be transmitted by microinjecting egg plasma from embryos of a strain containing actively transposing gypsy elements into embryos of a strain originally devoid of transposing elements. Horizontal transfer is also observed when individuals of the "empty" stock are raised on medium containing ground pupae of the stock possessing transposing elements. These results suggest that gypsy is an infectious retrovirus and provide evidence that retroviruses also occur in invertebrates.