The functions of asparagine-linked oligosaccharides on the PrENV protein of Friend mink cell focus-inducing (FrMCF-1) murine leukemia virus were investigated by examining the effect of two inhibitors of different stages of the biosynthetic pathway of these sugar substituents on the synthesis and processing of the viral proteins. Treatment of virus-producing cells with tunicamycin totally inhibited the glycosylation of PrEnv, and resulted in the formation of a nonglycosylated form of the protein of molecular weight 62 kDa. This component was not proteolytically processed inside the cells, and neither it nor any derivative proteins were incorporated into extracellular virions. Treatment of cells with 1-deoxynojirimycin (DNM), which inhibits the cellular glucosidases normally involved in removal of the three glucose residues present on the initially transferred oligosaccharide chains, resulted in the intracellular accumulation of a slightly larger than normal form of PrENV, and decreased levels of cell-associated gp70. Only gp70 was detected on the cell surface. The bulk of the gp70 produced in the presence of the drug was aberrantly glycosylated, and contained decreased levels of complex and increased numbers of high mannose oligosaccharides; almost all of the gp70 molecules however, contained at least one complex sugar chain. Decreased incorporation of both env and gag proteins into extracellular virions was observed, despite the fact that the gag proteins were processed normally intracellularly; in contrast, DNM treatment of Gazdar murine sarcoma virus-infected HTG2 cells, which produce only gag but not env proteins, did not inhibit the release of extracellular virus. Ultrastructural examination of FrMCF-infected cells treated with DNM indicated the presence of large numbers of intracytoplasmic vacuoles, many of which contained viral particles. These studies indicate that the normal maturation process involved in the formation of complex oligosaccharides is necessary to obtain efficient transport to the plasma membrane and proteolysis of PrEnv, and also provide evidence suggesting a role for the env proteins in regulating assembly of gag proteins into virions.