Though Alu elements are the most common and well-studied transposable elements in the primate genome, Alu evolutionary dynamics remain poorly understood. To better understand these dynamics, we improved our recently introduced Bayesian transposable element ancestral reconstruction method to incorporate automated alignment and be more computationally efficient. We then used it to reconstruct the relationships among almost 800,000 Alu elements in the human genome. We identified the phylogenetic network relating 154 ancestral replicative Alu sequences, and found that the aligned ancestors vary at only 56 out of ~300 sites. We show that the limited number of variable sites among replicative Alu ancestors is best explained by strong sequence constraints on Alu replicative capacity. Moreover, the pattern of variation suggests that sequence constraints fluctuated over the course of Alu evolution, driving the extinction of older Alu subfamilies and the birth of newer ones. Previous analyses have taken the tight clustering of Alu sequences with age as evidence that all Alu sequences are descended from a small number of "master elements." Our results imply instead that the clustering of Alu sequences with age results from fluctuating sequence constraints, and that there were over 4,000 replicative loci during the course of Alu evolution, most of which were disabled by mutation before mutating to new replicative sequences. We also predict which sites have been functionally important for replication, and how these sites have changed over time. The newly clarified dynamics of Alu evolution invalidate assumptions used in common methods of transposable element classification and phylogenetics.