Foamy viruses (FV) are unusual among retroviruses since they require both Gag and Env structural proteins for particle egress. Recently significant progress has been made towards the mechanistic understanding of the viral release process, in particular that of retroviruses, and the viral domains and cellular pathways involved. However little is currently known about domains of FV structural proteins and cellular proteins engaged in this process. By mutational analysis of sequence motifs in prototype FV (PFV) Gag, bearing homology to known late assembly (L) domains, a PSAP motif with L domain function that was functionally interchangeable by heterologous L domains was identified. In contrast the inactivation of a PPPI motif had no significant influence on PFV particle release, although mutant viral particles displayed reduced infectivity. Similarly mutation of an evolutionary conserved YXXL motif revealed no classical L-domain function but resulted in release of noninfectious viruslike particles. Biochemical and electron microscopy analysis demonstrated that these mutant particles incorporated all viral structural proteins but contained aberrantly capsid structures, suggesting a role in capsid assembly for this PFV Gag sequence motif. In line with the mutational analysis, overexpression of dominant negative (DN) mutants and wild-type TSG101 but not the DN mutant of AIP-1/ALIX reduced PFV particle release and infectivity. Furthermore, DN mutants of Vps4A, Vps4B, and CHMP3 inhibited PFV egress and infectivity. Taken together these results demonstrate that PFV, like other viruses, requires components of the vacuolar protein sorting (VPS) machinery for egress and enters the VPS pathway through interaction with TSG101.