Processing of polypeptides of the mouse mammary tumor virus, a type B retrovirus, was investigated in a transplanted thymic lymphoma cell line of the GR strain (GRSL). This cell line was maintained in vivo in ascites form and in vitro as a suspension culture. GRSL cells produce clusters of intracytoplasmic A particles and are virtually deficient in the production of mature extracellular B-type particles. As control, a mammary tumor cell line of the same mouse strain capable of complete virion synthesis was used. The kinetics of viral polypeptide synthesis were studied by pulse labeling with various isotopes (including (35)S and (32)P), followed by immunoprecipitation of cell lysates with monospecific antisera to the major mouse mammary tumor virus gag and env proteins, p27 and gp52, respectively. Both the primary gag and env precursor polypeptides were synthesized in the GRSL cells, but their conversion into viral proteins was impaired. The major gag precursor, Pr73(gag), was stable over a period of 8 h, and mature viral core polypeptides could not be detected. Also, the highly phosphorylated intermediates in the proteolytic processing of Pr73(gag) in virus-producing cells were absent in GRSL cells. By immunoprecipitation, Pr73(gag) was detected in a GRSL particle fraction with the density of intracytoplasmic A particles. The precursor for envelope proteins, Pr73(env), was turned over without the generation of mature viral envelope components gp52 and gp36. The in vivo-transplanted ascites GRSL cells, however, were shown to express gp52 on the cell surface together with a 73,000-dalton polypeptide, as indicated by cell surface iodination and immunoprecipitation.