Glycoproteins of several viruses have the capacity to induce release of noninfectious, capsidless particulate structures containing only the viral glycoprotein. Such structures are often called subviral particles (SVP). Foamy viruses (FVs), a special type of retroviruses with a replication strategy combining features of both orthoretroviruses and hepadnaviruses, express a glycoprotein (Env) which has the ability to induce SVP release. However, unlike human hepatitis B virus, prototype FV (PFV) naturally secretes only small amounts of SVPs, because ubiquitination of the Env protein seems to suppress the intrinsic capacity for induction of SVP release. In this study, we characterized the structural determinants influencing PFV SVP release, examined the role of specific Env ubiquitination sites in the regulation of this process, and analyzed the requirement of the cellular vacuolar protein sorting (VPS) machinery for SVP egress. We observed that the cytoplasmic and membrane-spanning domains of both the leader peptide (LP) and the transmembrane (TM) subunit harbor essential as well as inhibitory domains. Furthermore, only ubiquitination at the most N-terminal lysine residues (K(14) and K(15)) in LP reduced cell surface expression and suppressed SVP release to wild-type levels. This suggests that interaction of Env with cellular components required for SVP release suppression is effective only when Env is ubiquitinated at these lysine residues but not at others. Finally, SVP release was sensitive to dominant-negative mutants of late components, but not early components, of the cellular VPS machinery. PFV therefore differs from hepatitis B virus in using the same cellular pathway for egress of both virions and SVPs.