The transition from an immature to a fully infectious mature retrovirus particle is associated with molecular switches that trigger dramatic conformational changes in the structure of the Gag proteins. A dominant maturation switch that stabilizes the immature capsid lattice is located downstream of the capsid (CA) protein in many retroviral Gags. The HIV-1 Gag contains a stretch of five amino acid residues termed the 'clasp motif', important for the organization of the hexameric subunits that provide stability to the overall immature HIV-1 shell. Sequence alignment of the CA C-terminal domains (CTDs) of the HIV-1 and Mason-Pfizer Monkey Virus (M-PMV) highlighted a spacer-like domain in M-PMV that may provide comparable function. The importance of the sequences spanning the CA-NC cleavage has been demonstrated by mutagenesis, but the specific requirements for the clasp motif in several steps of M-PMV particle assembly and maturation have not been determined in detail. In the present study we report an examination of the role of the clasp motif in the M-PMV life cycle. We generated a series of M-PMV Gag mutants and assayed for assembly of the recombinant protein in vitro, and for the assembly, maturation, release, genomic RNA packaging, and infectivity of the mutant virus in vivo. The mutants revealed major defects in virion assembly and release in 293T and HeLa cells, and even larger defects in infectivity. Our data identifies the clasp motif as a fundamental contributor to CA-CTD interactions necessary for efficient viral infection. Importance The C-terminal domain of the capsid protein of many retroviruses has been shown to be critical for virion assembly and maturation, but the functions of this region of M-PMV are uncertain. We show that a short 'clasp' motif in the capsid domain of the M-PMV Gag protein plays a key role in M-PMV virion assembly, genome packaging, and infectivity.