An ancient clade of Penelope-like retroelements with permuted domains is present in the green lineage and protists, and dominates many invertebrate genomes.

Penelope-like elements (PLEs) are an enigmatic clade of retrotransposons whose reverse transcriptases (RTs) share a most recent common ancestor with telomerase RTs. The single ORF of canonical EN+ PLEs encodes RT and a C-terminal GIY-YIG endonuclease (EN) that enables intrachromosomal integration, while EN- PLEs lack endonuclease and are generally restricted to chromosome termini. EN+ PLEs have only been found in animals, except for one case of horizontal transfer to conifers, while EN- PLEs occur in several kingdoms. Here we report a new, deep-branching PLE clade with a permuted domain order, whereby an N-terminal GIY-YIG endonuclease is linked to a C-terminal RT by a short domain with a characteristic CxC motif. These N-terminal EN+ PLEs share a structural organization, including pseudo-LTRs and complex tandem/inverted insertions, with canonical EN+ PLEs from Penelope/Poseidon, Neptune and Nematis clades, and show insertion bias for microsatellites, but lack canonical hammerhead ribozyme motifs. However, their phylogenetic distribution is much broader. The Naiads, found in numerous invertebrate phyla, can reach tens of thousands of copies per genome. In spiders and clams, Naiads independently evolved to encode selenoproteins containing multiple selenocysteines. Chlamys, which lack the CCHH motif universal to PLE endonucleases, occur in green algae, spike mosses (targeting ribosomal DNA) and slime molds. Unlike canonical PLEs, RTs of N-terminal EN+ PLEs contain the insertion-in-fingers domain (IFD), strengthening the link between PLEs and telomerases. Additionally, we describe Hydra, a novel metazoan C-terminal EN+ clade. Overall, we conclude that PLE diversity, taxonomic distribution and abundance is comparable to non-LTR and LTR-retrotransposons.