Long interspersed nuclear element‐1 (LINE‐1 or L1) reactivation is linked to poor prognosis in non‐small‐cell lung carcinoma (NSCLC), but the molecular bases of this response remain largely unknown. In this report, we show that challenge of human bronchial epithelial cells (HBECs) with the lung carcinogen, benzo(a)pyrene (BaP), shifted the L1 promoter from a heterochromatic to euchromatic state through disassembly of the nucleosomal and remodeling deacetylase (NuRD) complex. Carcinogen challenge was also associated with partial displacement of constituent proteins from the nuclear to the cytoplasmic compartment. Disruption of NuRD corepression by genetic ablation or carcinogen treatment correlated with accumulation of L1
mRNA and proteins. Mi2β bound directly to the L1 promoter to effect retroelement silencing, and this response required the DNA‐ and ATPase‐binding domains of Mi2β. Sustained expression of L1 in HBECs was tumorigenic in a human–SCID mouse xenograft model, giving rise to tumors that regressed over time. Together, these results show that functional modulation of the NuRD constituent proteins is a critical molecular event in the activation of L1 retrotransposon. L1 expression creates a microenvironment in HBECs that is conducive to neoplasia and malignant transformation.