R1Bm is a non-LTR retrotransposon found specifically within 28S rRNA genes of the silkworm. Different from other non-LTR retrotransposons encoding two open reading frames (ORFs), R1Bm structurally lacks a poly (A) tract at its 3' end. To study how R1Bm initiates reverse transcription from the poly (A)-less template RNA, we established an in vivo retrotransposition system using recombinant baculovirus, and characterized retrotransposition activities of R1Bm. Target-primed reverse transcription (TPRT) of R1Bm occurred from the cleavage site generated by endonuclease (EN). The 147 bp of 3'-untranslated region (3'UTR) was essential for efficient retrotransposition of R1Bm. Even using the complete R1Bm element, however, reverse transcription started from various sites of the template RNA mostly with 5'-UG-3' or 5'-UGU-3' at their 3' ends, which are presumably base-paired with 3' end of the EN-digested 28S rDNA target sequence, 5'-AGTAGATAGGGACA-3'. When the downstream sequence of 28S rDNA target was added to the 3' end of R1 unit, reverse transcription started exactly from the 3' end of 3'UTR and retrotransposition efficiency increased. These results indicate that 3'-terminal structure of template RNA including read-through region interacts with its target rDNA sequences of R1Bm, which plays important roles in initial process of TPRT in vivo.