Transposable elements (TEs) constitute the most abundant portions of plant genomes and can dramatically shape host genomes during plant evolution. They also play important roles in crop domestication. However, whether TEs themselves are also selected during crop domestication remained unknown. Here, we identify an active long terminal repeat (LTR) retrotransposon, HUO, as a potential selection target during rice domestication and breeding. HUO is a low-copy-number LTR retrotransposon, and displays transposition activity under the natural growth conditions and transmits transpositions through male gametogenesis, preferentially inserting into genomic regions capable of transcription. HUO exists in all wild rice accessions, about half of the archaeological rice grains (1200-7000 years ago) and landraces, but is absent in almost all modern varieties, indicating its gradual elimination during rice domestication and breeding. Our data hints that HUO is subjected to strict gene silencing through the RNA-directed DNA methylation (RdDM) pathway. Our study also suggests that HUO may trigger genomic defense through altering genome-wide DNA methylation and small RNA biogenesis, and changing global gene expression, resulting in decreased disease resistance and yield, which may explain its elimination in rice breeding. Thus, our study reveals that negative selection of an active retrotransposon may be important for genome stability during crop domestication and breeding