While common in viral infections and neoplasia, spontaneous cell-cell fusion, or syncytialization, is quite restricted in healthy tissues. Such fusion is essential to human placental development, where interactions between trophoblast-specific human endogenous retroviral (HERV) envelope proteins, called syncytins, and their widely-distributed cell surface receptors are centrally involved. We have identified the first host cell-encoded protein that inhibits cell fusion in mammals. Like the syncytins, this protein, called suppressyn, is HERV-derived, placenta-specific and well-conserved over simian evolution. In vitro, suppressyn binds to the syn1 receptor and inhibits syn1-, but not syn2-mediated trophoblast syncytialization. Suppressyn knock-down promotes cell-cell fusion in trophoblast cells and cell-associated and secreted suppressyn binds to the syn1 receptor, ASCT2. Identification of the first host cell-encoded inhibitor of mammalian cell fusion may encourage improved understanding of cell fusion mechanisms, of placental morphogenesis and of diseases resulting from abnormal cell fusion.