Mismatches between parental genomes in selfish elements are frequently hypothesized to underlie hybrid dysfunction and drive speciation. However, because the genetic basis of most hybrid incompatibilities is unknown, testing the contribution of selfish elements to reproductive isolation is difficult. Here we evaluated the role of transposable elements (TEs) in hybrid incompatibilities between Drosophila virilis and D. lummei by experimentally comparing hybrid incompatibility in a cross where active TEs are present in D. virilis (TE+) and absent in D. lummei, to a cross where these TEs are absent from both D. virilis (TE-) and D. lummei genotypes. Using genomic data, we confirmed copy number differences in TEs between the D. virilis (TE+) strain and the D. virilis (TE-) strain and D. lummei. We observed F1 postzygotic reproductive isolation exclusively in the interspecific cross involving TE+ D. virilis but not in the cross involving TE- D. virilis. This precisely mirrors the intraspecies dysgenic phenotype where teste atrophy only occurs when TE+ D. virilis is the paternal parent. A series of backcross experiments, designed to account for alternative models of hybrid incompatibility, showed that both F1 hybrid incompatibility and intrastrain dysgenesis is consistent with the action of TEs rather than other, genic, interactions. A further Y-autosome interaction contributes to additional, sex-specific, inviability in one direction of this cross combination. These experiments demonstrate that TEs that cause intraspecies dysgenesis can increase reproductive isolation between closely related lineages, thereby adding to the processes that consolidate speciation.