We investigated the amino acid sequence requirements for intracellular cleavage of the Rous sarcoma virus glycoprotein precursor by introducing mutations into the region encoding the cleavage recognition site (Arg-Arg-Lys-Arg). In addition to mutants G1 (Arg-Arg-Glu-Arg) and Dr1 (deletion of all four codons) that we have reported on previously (L. G. Perez and E. Hunter, J. Virol. 61:1609-1614, 1987), we constructed two additional mutants, AR1 (Arg-Arg-Arg-Arg), in which the highly conserved lysine is replaced by an arginine, and S19 (Ser-Arg-Glu-Arg), in which no dibasic pairs remain. The results of these studies demonstrate that when the cleavage sequence is deleted (Dr1) or modified to contain unpaired basic residues (S19), intracellular cleavage of the glycoprotein precursor is completely blocked. This demonstrates that the cellular endopeptidase responsible for cleavage has a stringent requirement for the presence of a pair of basic residues (Arg-Arg or Lys-Arg). Furthermore, it implies that the cleavage enzyme is not trypsinlike, since it is unable to recognize arginine residues that are sensitive to trypsin action. Substitution of the mutated genes into a replication-competent avian retrovirus genome showed that cleavage of the glycoprotein precursor was not required for incorporation into virions but was necessary for infectivity. Treatment of BH-RCAN-S19-transfected turkey cells with low levels of trypsin resulted in the release of infectious virus, demonstrating that exogenous cleavage could generate a biologically active glycoprotein molecule.