A culture of mouse cells containing a 1,000-nucleotide deletion mutant of Moloney murine leukemia virus has been isolated. The deletion did not affect the size or function of the 21S mRNA that encodes the env gene products. Both the deleted RNA and the 21S mRNA were recovered in polyribosomes. Cells containing the deleted virus made no detectable Pr180gag-pol. Pr65gag synthesis with also absent, but a 45,000-molecular-weight gag gene product was found that might be encoded by the deleted genome. Biosynthesis of Pr80env proceeded normally in these cells; the intracellular precursor was cleaved and migrated to the cell surface as gp70. The cells could not be superinfected by homologous Moloney murine leukemia virus presumably because of surface restriction due to the gp70. Although the cells express the Moloney murine leukemia virus gp70 on their surface, they will not make pseudotypes after infection with vesicular stomatitis virus implying that Pr65gag may play a critical role in pseudotype formation. Induction of endogenous virus expression in the cells carrying the deletion mutant generated an N-tropic murine leukemia virus that can fuse XC cells. This may represent a recombinant between the deletion mutant and an endogenous virus.