Signal peptides (SP) are key determinants for targeting glycoproteins to the secretory pathway. Here we describe the involvement in particle maturation as an additional function of a viral glycoprotein SP. The SP of foamy virus (FV) envelope glycoprotein is predicted to be unusually long. Using an SP-specific antiserum, we demonstrate that its proteolytic removal occurs posttranslationally by a cellular protease and that the major N-terminal cleavage product, gp18, is found in purified viral particles. Analysis of mutants in proposed signal peptidase cleavage positions and N-glycosylation sites revealed an SP about 148 amino acids (aa) in length. FV particle release from infected cells requires the presence of cognate envelope protein and cleavage of its SP sequence. An N-terminal 15-aa SP domain with two conserved tryptophan residues was found to be essential for the egress of FV particles. While the SP N terminus was found to mediate the specificity of FV Env to interact with FV capsids, it was dispensable for Env targeting to the secretory pathway and FV envelope-mediated infectivity of murine leukemia virus pseudotypes.