Within the parasitic nematode Ancylostoma ceylanicum, a nearly 20 million-year-old Bel/Pao LTR-retrotransposon encodes an ancient viral class II envelope fusion protein. Typically, retroviruses and related degenerate retrotransposons encode a hemagglutinin-like class I envelope fusion protein. A subset of Bel/Pao LTR-retrotransposons within the phylum Nematoda have acquired a phlebovirus-like env and utilized the encoded fusion machinery to escape the genome as intact and novel exogenous retrovirus. This includes C. elegans retroelement 13 virus which was recently reclassified as a member of the genus Semotivirus. A 3.76 Å cryoEM reconstruction of the encoded membrane fusion machinery of the A. ceylanicum retroelement shows that it is a phleboviral homologue and class II fusion protein. Biophysical and biochemical characterization indicate this ancient class II fusion protein functions under specific physiological conditions targeting late-endosomal membranes much like modern viral class II fusogens. Together, this evidence points to a novel case of gene exaptation. Similarly, class II fusion homologues have been identified within the double-stranded, circular, nuclear plasmids of the slime mold Dictyostelium. While these plasmids, specifically Ddp1 and Ddp5, have been used as transfer vectors in dictyostelid studies, their relation to known viruses has gone unrecognized. Like the env captured by the BEL/Pao LTR retrotransposons of Nematoda, Ddp1 and Ddp5 encode a ‘developmental’ transcript that share features with a modern RVFV-like M-segment and likely represents another ancient class II fusion protein. Why this plasmid carries a complete set of fusion machinery and whether it forms infectious virus-like particles is yet to be determined. Regardless, the presence of Ddp1 and its potential role in sexual reproduction in Dictyostelium provide insight to the promiscuity of envs and the importance of selfish genetic elements (i.e. viruses, plasmids, and transposons) in host genomic evolution, horizontal gene transfer, and virus evolution. The work presented in this thesis highlights the role viral fusion proteins and their homologues in biological development and the evolution of sex. It demonstrates the potential of nematodes as an ideal system for the study of retrovirus evolution and retroviral degradation into LTR-retrotransposons and transposable elements. Due to the remarkable conservation of structure in the class II viral fusion protein fold, distant and likely functional homologues have been identified. In addition to the structural and biochemical analysis, the phylogenetic analysis included emphasizes the genetic exchange of envs and the potential for viral zoonoses or host shift.