L1 elements constitute a highly repetitive human DNA family (50,000 to 100,000 copies) lacking long terminal repeats and ending in a poly(A) tail. Some L1 elements are capable of retrotransposition in the human genome (Kazazian, H. H., Jr., C. Wong, H. Youssoufian, A. F. Scott, D. G. Phillips, and S.E. Antonarakis, Nature (London) 332:164-166, 1988). Although most are 5' truncated, a consensus sequence of complete L1 elements is 6 kb long and contains two open reading frames (ORFs) (Scott, A. F., B. J. Schmeckpeper, M. Abdelrazik, C. T. Comey, B. O'Hara, J. P. Rossiter, T. Cooley, P. Health, K. D. Smith, and L. Margolet, Genomics 1:113-125, 1987). The protein encoded by ORF2 has reverse transcriptase (RT) activity in vitro (Mathias, S. L., A. F. Scott, H. H. Kazazian, Jr., J. D. Boeke, and A. Gabriel, Science 254:1808-1810, 1991). Because L1 elements are so numerous, efficient methods for identifying active copies are required. We have developed a simple in vivo assay for the activity of L1 RT based on the system developed by Derr et al. (Derr, L. K., J. N. Strathern, and D. J. Garfinkel, Cell 67:355-364, 1991) for yeast HIS3 pseudogene formation. L1 ORF2 displays an in vivo RT activity similar to that of yeast Ty1 RT in this system and generates pseudogenes with unusual structures. Like the HIS3 pseudogenes whose formation depends on Ty1 RT, the HIS3 pseudogenes generated by L1 RT are joined to Ty1 sequences and often are part of complex arrays of Ty1 elements, multiple HIS3 pseudogenes, and hybrid Ty1/L1 elements. These pseudogenes differ from those previously described in that there are base pairs of unknown origin inserted at several of the junctions. In two of three HIS3 pseudogenes studied, the L1 RT appears to have jumped from the 5' end of a Ty1/L1 transcript to the poly(A) tract of the HIS3 RNA.