ZAM is an long terminal repeat (LTR) retrotransposon from Drosophila melanogaster that bears striking resemblance to the vertebrate retroviruses, in their structure and replication cycle. This element transposes via an RNA intermediate and its reverse transcription, and ultimately inserts copies within the germ line. In this paper, we show that intercellular communication established between the germ line cells and the somatic follicle cells is used to initiate the replication cycle of ZAM. ZAM has been shown to be transcribed in the follicle cells located at the posterior pole of the oocyte. Here, we determine the cis-regulatory elements necessary for its somatic expression, and show that they respond to the EGF-receptor signaling pathway and its activation by the ligand Gurken emitted by the germ line. We further show that the ETS-transcription factor Pointed2 acting downstream of this pathway acts as a trans-regulatory factor and targets a specific cis-regulatory binding site located within the ZAM LTR. Our data give an insight into the molecular mechanism for how intercellular communications between germ cells and somatic cells may be used by endogenous retroviruses to control their replication, and thereby specify their intrinsic and highly restricted expression in the reproductive apparatus.