Borna disease virus (BDV), a nonsegmented, negative-strand RNA virus, infects a wide variety of mammalian species and readily establishes a long-lasting, persistent infection in brain cells. Therefore, this virus could be a promising candidate as a novel RNA virus vector enabling stable gene expression in the central nervous system (CNS). Previous studies demonstrated that the 5' untranslated region of the genome is the only site for insertion and expression of a foreign gene. In this study, we established a novel BDV vector in which an additional transcription cassette has been inserted into an intercistronic noncoding region between the viral phosphoprotein (P) and matrix (M) genes. The recombinant BDV (rBDV) carrying green fluorescent protein (GFP) between the P and M genes, rBDV P/M-GFP, expressed GFP efficiently in cultured cells and rodent brains for a long period of time without attenuation. Furthermore, we generated a nonpropagating rBDV, ΔGLLP/M, which lacks the envelope glycoprotein (G) and a splicing intron within the polymerase gene (L), by the transcomplementation system with either transient or stable expression of the G gene. Interestingly, rBDV ΔGLLP/M established a persistent infection in cultured cells with stable expression of GFP in the absence of the expression of G. Using persistently infected rBDV ΔGLLP/M-infected cells, we determined the amino acid region in the cytoplasmic tail (CT) of BDV G important for the release of infectious rBDV particles and also demonstrated that the CT region may be critical for the generation of pseudotyped rBDV having vesicular stomatitis virus G protein. Our results revealed that the newly established BDV vector constitutes an alternative tool not only for stable expression of foreign genes in the CNS but also for understanding the mechanism of the release of enveloped virions.