Transposable elements (transposons) are mobile genetic sequences that can move within the genome, driving genetic innovation over evolutionary time. Our research suggests that transposon activity has influenced the evolution of the endosperm, a seed tissue that supports embryo growth, similar to the placenta in mammals. The endosperm, unique to flowering plants, forms when one of the two sperm cells fuses with the central cell, while the other fuses with the egg to form the embryo. We identified type I MADS-box transcription factors as key regulators of endosperm development. The binding sites for these factors are located within Helitron transposons, suggesting that transposons dispersed these regulatory sites across the genome. This highlights the essential role of transposons in endosperm evolution, shaping regulatory networks and epigenetic landscapes. These networks, however, become disrupted during interspecies hybridizations, leading to endosperm developmental failure and seed arrest, which in turn promote speciation in flowering plants. Using the Capsella genus as a model, we found that hybridizations between closely related Capsella species result in endosperm defects linked to chromosome condensation failures and loss of DNA methylation. These defects can be mitigated by increasing the ploidy of the maternal parent, indicating that a dosage-sensitive component in the maternal genome plays a critical role in hybridization success. We identified maternally-produced small RNAs, which guide DNA methylation in the endosperm, as this key component. An imbalance in these small RNAs between the parental genomes leads to improper gene regulation and endosperm arrest, providing new insights into the epigenetic basis of hybridization barriers.