Chimeric retrogenes, found in mammalian and fungal genomes, are bipartite elements composed of DNA copies of cellular transcripts either directly fused to each other or fused to the 3' part of a LINE retrotransposon. These cellular transcripts correspond to messenger RNAs, ribosomal RNAs, small nuclear RNAs and 7SL RNA. The chimeras are likely formed by RNA template switches during reverse transcription of LINE elements by their retrotranspositional machinery. The 5' part of chimeras are copies of nucleolar RNAs, suggesting that the nucleolus plays a significant role in LINE retrotransposition. RNAs from the nucleolus might have protective function against retroelement invasion or, alternatively, the nucleolus may be required for retrotranspositional complex assembly and maturation. These hypotheses will be discussed in this review.