We performed a thorough characterization of expressed repetitive element loci (RE) in the human orbitofrontal cortex (OFC) using directional RNA sequencing data. Considering only sequencing reads that map uniquely onto the human genome, we discovered that the overwhelming majority of intronic and exonic RE are expressed in the same orientation as the gene in which they reside. Our mapping approach enabled the identification of novel differentially expressed RE transcripts between the OFC and peripheral blood lymphocytes. Further analysis revealed that RE are extensively spliced into coding regions of gene transcripts yielding thousands of novel mRNA variants with altered coding potential. Lower frequency splicing of RE into untranslated regions of gene transcripts was also observed. The same pattern of RE splicing in the brain was also detected for Drosophila, zebrafish, mouse, rat, dog and rabbit. RE splicing occurs largely at canonical GT-AG splice junctions with LINE and SINE elements forming the most RE splice junctions in the human OFC. This type of splicing usually gives rise to a minor splice variant of the endogenous gene and in silico analysis suggests that RE splicing has the potential to introduce novel open reading frames. Reanalysis of previously published sequencing data performed in the mouse cerebellum revealed that thousands of RE splice variants are associated with translating ribosomes. Our results demonstrate that RE expression is more complex than previously envisioned and raise the possibility that RE splicing might generate functional protein isoforms.