Mouse mammary tumor virus (MMTV) is the prototypical member of the Betaretrovirus genus, but the processes of its morphogenesis are poorly characterized. In this report, we describe an unusual intracellular processing of MMTV Gag polyprotein in human 293T cells transiently expressing MMTV from heterologous promoter. The same specific cleavage products of the viral protease were seen for the wild type as well as for nonmyristylated mutant of MMTV Gag polyprotein completely defective in the particle release. Inactivation of the viral protease resulted in more stable Gag polyprotein and in accumulation of intracytoplasmic particles for nonmyristylated Gag. The intracellular processing of nonmyristylated MMTV Gag indicates that protease activation in betaretrovirus can occur independently of budding.