Murine leukemia virus ecotropic and amphotropic envelope expression vectors were genetically engineered to generate truncations of the p15E TM cytoplasmic tail. The ecotropic construct CEET has the entire cytoplasmic tail of TM deleted, while the CEETR construct has only the R peptide portion of the tail deleted, thereby producing a TM subunit (p12E) that is identical to the one found in mature virions. The analogous amphotropic constructs were called CAET and CAETR. These envelopes, as opposed to their p15E TM counterparts, mediate cell-to-cell fusion at neutral pH in both transformed and nontransformed cell lines. Though the TM cytoplasmic domain is not required, its presence appears to augment such cell-to-cell fusion. This envelope-dependent fusion requires the presence of the viral receptor on the cell surface. Ecotropic virions bearing the p12E TM contain wild-type levels of the envelope complex and have near-normal titers. In contrast, virions which lack the cytoplasmic domain of TM (e.g., CEET) have 10- to 100-fold-lower titers but contain normal amounts of envelope. Both of the corresponding amphotropic virions contain normal amounts of envelope but have 10- to 100-fold-lower titers. Using immunofluorescent detection of envelope to monitor the fate of receptor-bound virions, we found that ecotropic murine leukemia virus envelope disappears from the cell surface while amphotropic envelope persists on the cell surface after virus binding. This pattern of immunofluorescence is consistent with the proposed routes of cell entry for these viruses, i.e., by endocytosis and direct fusion, respectively. In this assay, ecotropic virions bearing the genetically engineered p12E TM also appear to be internalized despite the ability of their envelope to mediate fusion at neutral pH in the same target cells. Our results show that direct fusion at neutral pH is a natural consequence of the surface expression of the mature ecotropic envelope and its receptor. We propose that the processing of the R peptide from the envelope TM (p15E) to yield p12E, at the time of virus budding or within virions, renders the envelope competent to fuse.