Avian leukosis virus (ALV) subgroup J is thought to have emerged through a recombination event between an unknown exogenous ALV and the endogenous retrovirus elements designated EAV-HP. All EAV-HP elements identified to date in the chicken genome show large deletions, including that of the entire pol gene. Here we report the identification of four segregating chicken EAV-HP proviruses with complete pol genes, one of which shows exceptionally high sequence identity and a close phylogenetic relationship with ALV-J with respect to the env gene. Embryonic expression of EAV-HP env has been suggested as a factor associated with immunological tolerance induction in a proportion of ALV-J-infected meat-type chickens. In support of this, env gene transcripts expressed from two of the four newly identified EAV-HP proviruses were demonstrated in chicken embryos. However, when ALV-J-infected outbred meat-type chickens were assessed, the presence of intact EAV-HP proviruses failed to directly correlate with ALV-J tolerance. This association was further examined using F(2) progeny of two inbred lines of layer chicken that differed in EAV-HP status and immunological responses to ALV-J. Immunological tolerance developed in a small proportion of F(2) progeny birds, reflecting the expected phenotypic ratio for inheritance of a double-recessive genotype; however, the status of tolerance did not show any direct correlation with the presence of the intact EAV-HP sequence. Nevertheless, identification of an intact chicken EAV-HP locus showing a uniquely close relationship to the ALV-J prototype clone HPRS-103 in the env region provides the strongest evidence of its contribution to the emergence of ALV-J by recombination.