Assembly of an infectious retrovirus requires the incorporation of the envelope glycoprotein complex during the process of particle budding. We have recently demonstrated that amino acid substitutions of a tyrosine residue in the cytoplasmic domain block glycoprotein incorporation into budding Mason-Pfizer monkey virus (M-PMV) particles and abrogate infectivity (C. Song, S. R. Dubay, and E. Hunter, J. Virol. 77:5192-5200, 2003). To investigate the contribution of other amino acids in the cytoplasmic domain to the process of glycoprotein incorporation, we introduced alanine-scanning mutations into this region of the transmembrane protein. The effects of the mutations on glycoprotein biosynthesis and function, as well as on virus infectivity, have been examined. Mutation of two cytoplasmic residues, valine 20 and histidine 21, inhibits viral protease-mediated cleavage of the cytoplasmic domain that is observed during virion maturation, but the mutant virions show only moderately reduced infectivity. We also demonstrate that the cytoplasmic domain of the M-PMV contains three amino acid residues that are absolutely essential for incorporation of glycoprotein into virions. In addition to the previously identified tyrosine at residue 22, an isoleucine at position 18 and a leucine at position 25 each mediate the process of incorporation and efficient release of virions. While isoleucine 18 may be involved in direct interactions with immature capsids, antibody uptake studies showed that leucine 25 and tyrosine 22 are part of an efficient internalization signal in the cytoplasmic domain of the M-PMV glycoprotein. These results demonstrate that the cytoplasmic domain of M-PMV Env, in part through its YXXL-mediated endocytosis and intracellular trafficking signals, plays a critical role in the incorporation of glycoprotein into virions.