Gypsy group retrotransposons in the Egyptian cotton, Gossypium barbadense, was examined by phylogenetic and molecular evolutionary analyses. DNA sequences of gypsy group retrotransposons in two G. barbadense cultivars revealed that these sequences are heterogeneous and represent two distinct families. Sequence variation between these families seems to preserve coding information of the reverse transcriptase domain. The high ratio of synonymous to nonsynonymous changes indicates that the reverse transcriptase domain of these families is evolving under purifying selection. Our phylogenetic analysis revealed that the closest relatives of cotton retroelements are found in other plants gypsy group retrotransposons. Cotton retroelements-encoded transcripts were detected in their related respective young seedlings using RNA slot-blot hybridization, suggesting their transcriptional activity. The wide distribution of gypsy group retrotransposons and the detection of their encoded transcripts illustrate their active role in the Gossypium genome.