We propose that retroviruses exploit a cell-encoded pathway of intercellular vesicle traffic, exosome exchange, for both the biogenesis of retroviral particles and a low-efficiency but mechanistically important mode of infection. This Trojan exosome hypothesis reconciles current paradigms of retrovirus-directed transmission with the unique lipid composition of retroviral particles, the host cell proteins present in retroviral particles, the complex cell biology of retroviral release, and the ability of retroviruses to infect cells independently of Envelope protein-receptor interactions. An exosomal origin also predicts that retroviruses pose an unsolvable paradox for adaptive immune responses, that retroviral antigen vaccines are unlikely to provide prophylactic protection, and that alloimmunity is a central component of antiretroviral immunity. Finally, the Trojan exosome hypothesis has important implications for the fight against HIV and AIDS, including how to develop new antiretroviral therapies, assess the risk of retroviral infection, and generate effective antiretroviral vaccines.