Retrotransposons and retroviral insertions have molded the genomes of many eukaryotes. Since retroelements transpose via an RNA intermediate, the additive nature of the replication cycle can result in massive increases in copy number if left unchecked. Host organisms have countered with several defense systems, including domestication of retroelement genes that now act as restriction factors to minimize propagation. We discovered a novel truncated form of the Saccharomyces Ty1 retrotransposon capsid protein, dubbed p22 that inhibits virus-like particle (VLP) assembly and function. The p22 restriction factor expands the repertoire of defense proteins targeting the capsid and highlights a novel host-parasite strategy. Instead of inhibiting all transposition by domesticating the restriction gene as a distinct locus, Ty1 and budding yeast may have coevolved a relationship that allows high levels of transposition when Ty1 copy numbers are low and progressively less transposition as copy numbers rise. Here, we offer a perspective on p22 restriction, including its mode of expression, effect on VLP functions, interactions with its target, properties as a nucleic acid chaperone, similarities to other restriction factors, and future directions.