Walleye dermal sarcoma virus (WDSV) is a newly described retrovirus that is etiologically associated with a multifocal skin tumor of a fish common in North America, the walleye. Tumor prevalence ranges from 27% of adult walleyes in a densely populated lake, Oneida Lake, New York, to 1% in less populated waters. Phylogenetic analysis of the surface (SU) domain of the WDSV envelope gene of isolates from different regions of North America showed that viral isolates formed distinct clusters according to their geographic origin, except viral isolates from Oneida Lake, which were also much more variable. Viral clones isolated from an individual tumor had identical nucleotide sequences. This finding is consistent with tumors developing from single infected dermal cells, and supports the etiological role of this virus in tumor development. Like in other retroviruses, the SU domain of the WDSV env gene was more variable than gag, and the ratio of nonsynonymous over synonymous mutations was comparable to that of the V3 loop of HIV-1. These findings indicate that WDSV SU is the object of strong selective immunologic pressures, like the SU domain of other retroviruses.