Among the Retroviridae, foamy viruses (FVs) exhibit an unusual way of particle assembly and a highly specific incorporation of envelope protein into progeny virions. We have analyzed deletions and point mutants of the prototypic FV gag gene for capsid assembly and egress, envelope protein incorporation, infectivity, and ultrastructure. Deletions introduced at the 3' end of gag revealed the first 297 amino acids (aa) to be sufficient for specific Env incorporation and export of particulate material. Deletions introduced at the 5' end showed the region between aa 6 and 200 to be dispensable for virus capsid assembly but required for the incorporation of Env and particle egress. Point mutations were introduced in the 5' region of gag to target residues conserved among FVs from different species. Alanine substitutions of residues in a region between aa 40 and 60 resulted in severe alterations in particle morphology. Furthermore, at position 50, this region harbors the conserved arginine that is presumably at the center of a signal sequence directing FV Gag proteins to a cytoplasmic assembly site.