In Drosophila, at the population and species level, fixation of a TE insertion is an unlikely fate. Of the few reported fixations at the species level most involve non-LTR retroelements. In this work we report the fixation of a non-LTR retroelement in five species (Drosophila littoralis, Drosophila virilis, Drosophila lummei, Drosophila americana and Drosophila novamexicana) of the virilis group of Drosophila. In most species, this TE insertion is being lost through the accumulation of small deletions, but there is also evidence for the accumulation of large deletions. In the americana lineage an insertion of about 900 bp of the non-LTR retroelement is a marker for the Xc inversion. This insertion is, at most, 80 kb away from the basal Xc inversion breakpoint. The presence of a bilbo-like element in D. littoralis but not in D. kanekoi, suggests that D. littoralis is more closely related to species of the virilis phylad than to species of the montana phylad, which is in contrast with the traditional view. Nevertheless, the phylogenetic analyses here performed using a 7 gene dataset suggest that D. littoralis is indeed more closely related to species of the virilis phylad than to species of the montana phylad. The re-evaluation of the phylogenetic relationship of the species of the virilis group, under the assumption of a relaxed molecular clock, results in an estimated age of the bilbo-like element insertion of at least 7.5 Mya.