Short interspersed elements (SINEs) are highly abundant components of mammalian genomes that are propagated by retrotransposition. SINEs are recognized as a causal agent of human disease and must also have had a profound influence in shaping eukaryotic genomes. The B2 SINE family constitutes approximately 0.7% of total mouse genomic DNA (ref. 2) and is also found at low abundance in humans. It resembles the Alu family in several respects, such as its mechanism of propagation. B2 SINEs are derived from tRNA and are transcribed by RNA polymerase (pol) III to generate short transcripts that are not translated. We find here, however, that one B2 SINE also carries an active pol II promoter located outside the tRNA region. Indeed, a B2 element is responsible for the production of a mouse Lama3 transcript. The B2 pol II promoters can be bound and stimulated by the transcription factor USF (for upstream stimulatory factor), as shown by transient transfection experiments. Moreover, this pol II activity does not preclude the pol III transcription necessary for retrotransposition. Dispersal of B2 SINEs by retrotransposition may therefore have provided numerous opportunities for creating regulated pol II transcription at novel genomic sites. This mechanism may have allowed the evolution of new transcription units and new genes.