Endogenous retroviruses (ERVs) make up a large fraction of mammalian genomes and are thought to contribute to human disease, including brain disorders. In the brain, aberrant activation of ERVs is a potential trigger for an inflammatory response, but mechanistic insight into this phenomenon remains lacking. Using CRISPR/Cas9-based gene disruption of the epigenetic co-repressor protein Trim28, we found a dynamic H3K9me3-dependent regulation of ERVs in proliferating neural progenitor cells (NPCs), but not in adult neurons. In vivo deletion of Trim28 in cortical NPCs during mouse brain development resulted in viable offspring expressing high levels of ERVs in excitatory neurons in the adult brain. Neuronal ERV expression was linked to activated microglia and the presence of ERV-derived proteins in aggregate-like structures. This study demonstrates that brain development is a critical period for the silencing of ERVs and provides causal in vivo evidence demonstrating that transcriptional activation of ERV in neurons results in an inflammatory response.