Given that retroposed copies of genes are presumed to lack the regulatory elements required for their expression, retroposition has long been considered a mechanism without functional relevance. However, through an in silico assay for transcriptional activity, we identify here >1,000 transcribed retrocopies in the human genome, of which at least approximately 120 have evolved into bona fide genes. Among these, approximately 50 retrogenes have evolved functions in testes, more than half of which were recruited as functional autosomal counterparts of X-linked genes during spermatogenesis. Generally, retrogenes emerge "out of the testis," because they are often initially transcribed in testis and later evolve stronger and sometimes more diverse spatial expression patterns. We find a significant excess of transcribed retrocopies close to other genes or within introns, suggesting that retrocopies can exploit the regulatory elements and/or open chromatin of neighboring genes to become transcribed. In direct support of this hypothesis, we identify 36 retrocopy-host gene fusions, including primate-specific chimeric genes. Strikingly, 27 intergenic retrogenes have acquired untranslated exons de novo during evolution to achieve high expression levels. Notably, our screen for highly transcribed retrocopies also uncovered a retrogene linked to a human recessive disorder, gelatinous drop-like corneal dystrophy, a form of blindness. These functional implications for retroposition notwithstanding, we find that the insertion of retrocopies into genes is generally deleterious, because it may interfere with the transcription of host genes. Our results demonstrate that natural selection has been fundamental in shaping the retrocopy repertoire of the human genome.