X-linked dystonia-parkinsonism (XDP) is a severe neurodegenerative disorder that manifests as adult-onset dystonia combined with parkinsonism. A SINE-VNTR-Alu (SVA) retrotransposon inserted in an intron of the TAF1 gene reduces its expression and alters splicing in XDP patient-derived cells. As a consequence, increased levels of the TAF1 intron retention transcript TAF1-32i can be found in XDP cells as compared to healthy controls. Here, we investigate the sequence of the deep intronic region included in this transcript and show that it is also present in cells from healthy individuals, albeit in lower amounts than in XDP cells, and that it undergoes degradation by nonsense-mediated mRNA decay. Furthermore, we investigate epigenetic marks (e.g., DNA methylation and histone modifications) present in this intronic region and the spanning sequence. Finally, we show that the SVA evinces regulatory potential, as demonstrated by its ability to repress the TAF1 promoter in vitro. Our results enable a better understanding of the disease mechanisms underlying XDP and transcriptional alterations caused by SVA retrotransposons.