Long terminal repeat retrotransposons (LTR) are widespread in vertebrates and their dynamism facilitates genome evolution. However, these endogenous retroviruses (ERVs) must be restricted to maintain genomic stability. The APOBECs, a protein family that can edit C-to-U in DNA, do so by interfering with reverse transcription and hypermutating retrotransposon DNA. In some cases, a retrotransposon may integrate into the genome despite being hypermutated. Such an event introduces a unique sequence into the genome, increasing retrotransposon diversity and the probability of developing new function at the locus of insertion. The prevalence of this phenomenon and its effects on vertebrate genomes are still unclear. In this study, we screened ERV sequences in the genomes of 123 diverse species and identified hundreds of thousands of edited sites in multiple vertebrate lineages, including placental mammals, marsupials, and birds. Numerous edited ERVs carry high mutation loads, some with greater than 350 edited sites, profoundly damaging their open-reading frames. For many of the species studied, this is the first evidence that APOBECs are active players in their innate immune system. Unexpectedly, some birds and especially zebra finch and medium ground-finch (one of Darwin’s finches) are exceptionally enriched in DNA editing. We demonstrate that edited retrotransposons may be preferentially retained in active genomic regions, as reflected from their enrichment in genes, exons, promoters, and transcription start sites, thereby raising the probability of their exaptation for novel function. In conclusion, DNA editing of retrotransposons by APOBECs has a substantial role in vertebrate innate immunity and may boost genome evolution.