Transposable elements (TEs) are known to provide DNA for host regulatory functions, but the mechanisms underlying the transformation of TEs into cis-regulatory elements are unclear. In humans two TEs--MER20 and MER39--contribute the enhancer/promoter for decidual prolactin (dPRL), which is dramatically induced during pregnancy. We show that evolution of the strong human dPRL promoter was a multistep process that took millions of years. First, MER39 inserted near MER20 in the primate/rodent ancestor, and then there were two phases of activity enhancement in primates. Through the mapping of causal nucleotide substitutions, we demonstrate that strong promoter activity in apes involves epistasis between transcription factor binding sites (TFBSs) ancestral to MER39 and derived sites. We propose a mode of molecular evolution that describes the process by which MER20/MER39 was transformed into a strong promoter, called "epistatic capture." Epistatic capture is the stabilization of a TFBS that is ancestral but variable in outgroup lineages, and is fixed in the ingroup because of epistatic interactions with derived TFBSs. Finally, we note that evolution of human promoter activity coincides with the emergence of a unique reproductive character in apes, highly invasive placentation. Because prolactin communicates with immune cells during pregnancy, which regulate fetal invasion into maternal tissues, we speculate that ape dPRL promoter activity evolved in response to increased invasiveness of ape fetal tissue.