Although small RNAs efficiently control transposition activity of most transposons in the host genome, such an immune system is not always applicable against a new transposon's invasions. Here, we explored a possibility to introduce potentially mobile copy of the Penelope retroelement previously implicated in hybrid dysgenesis syndrome in Drosophila virilis into the genomes of two distant Drosophila species. The consequences of such introduction were monitored at different phases after experimental colonization as well as in D. virilis species, which is apparently in the process of ongoing Penelope invasion. We investigated the expression of Penelope and biogenesis of Penelope-derived small RNAs in D. virilis and D. melanogaster strains originally lacking active copies of this element after experimental Penelope invasion. These strains were transformed by constructs containing intact Penelope copies. We show that immediately after transformation, which imitates the first stage of retroelement invasion, Penelope undergoes transposition predominantly in somatic tissues, and may produce siRNAs that are apparently unable to completely silence its activity. However, at the later stages of colonization Penelope copies may jump into one of the piRNA-clusters, which results in production of homologous piRNAs that are maternally deposited and can silence euchromatic transcriptionally active copies of Penelope in trans and, hence, prevent further amplification of the invader in the host genome. Intact Penelope copies and different classes of Penelope-derived small RNAs were found in most geographical strains of D. virilis collected throughout the world. Importantly, all strains of this species containing full-length Penelope tested do not produce gonadal sterility in dysgenic crosses and, hence, exhibit neutral cytotype. To understand whether RNA interference mechanism able to target Penelope operates in related species of the virilis group, we correlated the presence of full-length and potentially active Penelope with the occurrence of piRNAs homologous to this transposable element in the ovaries of species comprising the group. It was demonstrated that Penelope-derived piRNAs are present in all virilis group species containing full-length but transcriptionally silent copies of this element that probably represent the remnants of its previous invasions taking place in the course of the virilis species divergent evolution.