Background Koala Retrovirus-A is a gamma-retrovirus that is spreading across wild koala populations through horizontal and vertical transmission, contributing significantly to genomic diversity across and even within koala populations. Previous studies have estimated that KoRV-A initially integrated into the koala genome less than 50,000 years ago, but the precise origins and the patterns of spread after its endogenization remain unclear. Results In this study, we analyzed germline insertions of KoRV-A using whole-genome sequencing data from 405 wild koalas, representing nearly the species' entire geographic range. Our findings reveal an evolutionary trajectory for KoRV-A, suggesting that the initial endogenization might occur near Coffs Harbour on the Mid-north coast of NSW around the middle of the koala's range. As KoRV-A spread, certain subtypes emerged and became prevalent, two of which recombined with an ancient endogenous retrovirus, PhER, resulting in distinct recombination variants in northern and southern koala populations. Additionally, we identified a geographic barrier north of Sydney, which may have slowed the southward spread of KoRV-A into Sydney and beyond. Conclusions Our study proposes a comprehensive evolutionary pathway for KoRV-A, beginning with its initial endogenization near Coffs Harbour and highlighting barriers and diversification events that have shaped its distribution and impact on koala populations.