Chromatin architecture has been implicated in cell-type-specific gene regulatory programs; yet, how chromatin remodels during development remains to be fully elucidated. Here, by interrogating chromatin reorganization during human pluripotent stem cell (PSC) differentiation, we discover a role for the primate-specific endogenous retrotransposon HERV-H in creating topologically associating domains (TAD) in human PSCs. Deleting these HERV-H elements eliminates their corresponding TAD boundaries and reduces transcription of upstream genes, while
de novo
insertion of HERV-Hs can introduce new TAD boundaries. HERV-H’s ability to create these TAD boundaries depends on high transcription, as transcriptional repression of HERV-H elements prevents formation of these boundaries. This ability is not limited to human PSCs, as these actively transcribed HERV-Hs and their corresponding TAD boundaries also appear in PSCs from other hominids but not in more distantly related species lacking HERV-Hs. Overall, our results provide direct evidence for retrotransposons in actively shaping cell-type- and species-specific chromatin architecture.