Domestication events of long terminal repeat (LTR) sequences of the human endogenous retrovirus (HERV) family have been considered to be a new mechanism for the generation of alternative splicing in the human genome. We investigated an LTR10A belonging to the HERV-I family at the human endothelial nitric oxide synthase (NOS3) gene locus. The LTR10A element was located upstream of the original promoter sequences of NOS3. Expression analysis using RT-PCR and reporter gene assays in HCT116 and COS7 cells indicated placenta-specific expression of NOS3 driven by the LTR10A-derived promoter. The placenta-restricted expression was also determined to be associated with hypomethylation of the LTR10A element by methylation analysis using sodium bisulfite DNA sequencing. Furthermore, treatment of brain-derived cell lines with demethylation reagents did not restore expression of the LTR-derived NOS3 gene transcript. Taken together, the integration event of an LTR10A element in the upstream region of NOS3 led to the generation of a placenta-specific alternative transcript governed by cooperative mechanisms of epigenetic control (DNA methylation) and transcriptional regulation (interaction between cis- and trans-acting elements).