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Despite often being classified as selfish or junk DNA, transposable elements (TEs) are a group of abundant genetic sequences that have a significant impact on mammalian development and genome regulation. In recent years, our understanding of how pre-existing TEs affect genome architecture, gene regulatory networks and protein function during mammalian embryogenesis has dramatically expanded. In addition, the mobilization of active TEs in selected cell types has been shown to generate genetic variation during development and in fully differentiated tissues. Importantly, the ongoing domestication and evolution of TEs appears to provide a rich source of regulatory elements, functional modules and genetic variation that fuels the evolution of mammalian developmental processes. Here, we review the functional impact that TEs exert on mammalian developmental processes and discuss how the somatic activity of TEs can influence gene regulatory networks.