Retrotransposons constitute a significant fraction of mammalian genomes. Considering the finding of widespread transcriptional activity across entire genomes, it is not surprising that retrotransposons contribute to the collective RNA pool. However, the transcriptional output from retrotransposons does not merely represent spurious transcription. We review examples of functional RNAs transcribed from retrotransposons, and address the collection of non-protein coding RNAs derived from transposable element sequences, including numerous human microRNAs and the neuronal BC RNAs. Finally, we review the emerging understanding of how retrotransposons themselves are regulated by small RNAs.