Human endogenous retroviruses (HERVs) comprise approximately 8% of the human genome, but all are remnants of ancient retroviral infections and harbor inactivating mutations that render them replication defective. Nevertheless, as viral “fossils,” HERVs may provide insights into ancient retrovirus-host interactions and their evolution. Indeed, one endogenous retrovirus [HERV-K(HML-2)], which has replicated in humans for the past few million years but is now thought to be extinct, was recently reconstituted in a functional form, and infection assays based on it have been established. Here, we show that several human APOBEC3 proteins are intrinsically capable of mutating and inhibiting infection by HERV-K(HML-2) in cell culture. We also present striking evidence that two HERV-K(HML-2) proviruses that are fixed in the modern human genome (HERV-K60 and HERV-KI) were subjected to hypermutation by a cytidine deaminase. Inspection of the spectrum of mutations that are found in HERV-K proviruses in the human genome and HERV-K DNA generated during in vitro replication in the presence of each of the human APOBEC3 proteins unequivocally identifies APOBEC3G as the cytidine deaminase responsible for hypermutation of HERV-K60 and HERV-KI. This is a rare example of the antiretroviral effects of APOBEC3G in the setting of natural human infection, whose consequences have been fossilized in human DNA, and a striking example of inactivation of ancient retroviruses in humans through enzymatic cytidine deamination.