The ongoing arms race between transposable elements and their host organisms is a central driver of genetic innovation and biological diversity. Yet, despite this crucial role, the underlying principles that govern transposon-host interactions remain poorly understood. The ERVolution project aims to gain critical insights into the evolutionary dynamics and rules of the ancient transposon-host conflict. The project focuses on the Drosophila ovary ecosystem and the diversification of insect endogenous retroviruses (ERVs), a highly successful group of genome parasites that have acquired the ability to invade germ cells from surrounding somatic cells as viral particles to multiply in the germline genome. Through a multidisciplinary approach that combines host and transposon genetics, single-cell genomics, machine learning, and controlled transposon invasion experiments, we will investigate how transposon-host interactions create biological diversity by driving molecular innovations on both sides. Specifically, the project aims to uncover (i) how infectious ERVs exploit cell biological processes in the host gonad for their soma-to-germline transmission, (ii) how ERVs diversify their compact cis-regulatory elements to optimally adapt their expression to the host, and (iii) how the host transposon defence system exploits an Achilles' heel of ERVs, their unusual nucleotide composition, to silence both old and new genome invaders. The ERVolution project provides a unique opportunity to uncover general principles of transposon-host interactions by studying the molecular and evolutionary processes of a major battle between multiple transposons and an experimentally accessible host model organism. The project’s results are expected to have far-reaching implications beyond Drosophila, particularly in the fields of retrovirology, the evolution of cis-regulatory sequences of transposons, and the fundamental question of how eukaryotic cells distinguish their own from foreign RNA.