Transposable elements (TEs) are mobile DNA sequences that can move from one location to another in the genome. These elements encode regulatory features including transcriptional promotion and termination signals facilitating the production of new transcripts (or elements). The elements thus produced are inserted back into the genome. Due to their insertional capacity and encoded regulatory features, TEs have, in recent years, been recognized as significant contributors to regulatory variation both within and between species. In comparing the human and chimpanzee genomes it has been hypothesized that the genetic basis of the phenotypic differences that distinguish them may be the result of regulatory differences existing between the two species. Since TEs inserted in proximity to genes can significantly alter gene expression patterns, this research aims at exploring the influence of TE sequences and retrotransposons in particular in the evolution of gene regulation between humans and chimpanzees. A first systematic search of one particular class of retrotransposons - endogenous retroviruses (ERVs) was carried out in the chimpanzee genome. Forty two families of ERVs were identified in the chimpanzee genome including the discovery of 9 previously unknown families in humans. The vast majority of these families were found to have orthologs in the human genome except for two (CERV 1/PTERV1 and CERV 2) families. The two CERV families without orthologs in the human genome display a patchy distribution among primates. Nine families of chimpanzee ERVs have been transpositionally active since the human-chimpanzee divergence, while only two families have been active in the human lineage. The genomic differences [INDEL variation (80-12,000 bp in length)] between humans and chimpanzees are laid out. The INDEL variation located in or near genes is categorized in detail and is correlated with differences in gene expression patterns in a variety of organs and tissues. Results indicate that the majority of the INDEL variation between the two species is associated with retrotransposon sequences and that this variation is significantly correlated with differences in gene expression most notably in brain and testes. These findings are consistent with the hypothesis that retrotransposon mediated regulatory variation may have been a significant factor in human/chimpanzee evolution.