Hundreds of highly conserved distal cis-regulatory elements have been characterized so far in vertebrate genomes. Many thousands more are predicted on the basis of comparative genomics. However, in stark contrast to the genes that they regulate, in invertebrates virtually none of these regions can be traced by using sequence similarity, leaving their evolutionary origins obscure. Here we show that a class of conserved, primarily non-coding regions in tetrapods originated from a previously unknown short interspersed repetitive element (SINE) retroposon family that was active in the Sarcopterygii (lobe-finned fishes and terrestrial vertebrates) in the Silurian period at least 410 million years ago (ref. 4), and seems to be recently active in the 'living fossil' Indonesian coelacanth, Latimeria menadoensis. Using a mouse enhancer assay we show that one copy, 0.5 million bases from the neuro-developmental gene ISL1, is an enhancer that recapitulates multiple aspects of Isl1 expression patterns. Several other copies represent new, possibly regulatory, alternatively spliced exons in the middle of pre-existing Sarcopterygian genes. One of these, a more than 200-base-pair ultraconserved region, 100% identical in mammals, and 80% identical to the coelacanth SINE, contains a 31-amino-acid-residue alternatively spliced exon of the messenger RNA processing gene PCBP2 (ref. 6). These add to a growing list of examples in which relics of transposable elements have acquired a function that serves their host, a process termed 'exaptation', and provide an origin for at least some of the many highly conserved vertebrate-specific genomic sequences.