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Summary L1 retrotransposon-derived sequences comprise approximately 17% of the human genome. Darwinian selective pressures alter L1 genomic distributions during evolution, confounding the ability to determine initial L1 integration preferences. Here, we generated high-confidence datasets of greater than 88,000 engineered L1 insertions in human cell lines that act as proxies for cells that accommodate retrotransposition in vivo. Comparing these insertions to a null model, in which L1 endonuclease activity is the sole determinant dictating L1 integration preferences, demonstrated that L1 insertions are not significantly enriched in genes, transcribed regions, or open chromatin. By comparison, we provide compelling evidence that the L1 endonuclease disproportionately cleaves predominant lagging strand DNA replication templates, while lagging strand 3'-hydroxyl groups may prime endonuclease-independent L1 retrotransposition in a Fanconi anemia cell line. Thus, acquisition of an endonuclease domain, in conjunction with the ability to integrate into replicating DNA, allowed L1 to become an autonomous, interspersed retrotransposon.