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Background: In mammals, an important source of genomic variation is insertion polymorphism of retrotransposons. These may acquire a functional role when inserted inside genes or in their proximity. The aim of this work was to carry out a genome wide analysis of ERE1 retrotransposons in the horse and to analyze insertion polymorphism in relation to evolution and function. The effect of an ERE1 insertion in the promoter of the myostatin gene, which is involved in muscle development, was also investigated. Results: In the horse population, the fraction of ERE1 polymorphic loci is related to the degree of similarity to their consensus sequence. Through the analysis of ERE1 conservation in seven equid species, we established that the level of identity to their consensus is indicative of evolutionary age of insertion. The position of ERE1s relative to genes suggests that some elements have acquired a functional role. Reporter gene assays showed that the ERE1 insertion within the horse myostatin promoter affects gene expression. The frequency of this variant promoter correlates with sport aptitude and racing performance. Conclusions: Sequence conservation and insertion polymorphism of ERE1 elements are related to the time of their appearance in the horse lineage, therefore, ERE1s are a useful tool for evolutionary and population studies. Our results suggest that the ERE1 insertion at the myostatin locus has been unwittingly selected by breeders to obtain horses with specific racing abilities. Although a complex combination of environmental and genetic factors contributes to athletic performance, breeding schemes may take into account ERE1 insertion polymorphism at the myostatin promoter. [ABSTRACT FROM AUTHOR]