To investigate the relationship between the fusogenic properties of HTLV-II and the processing of the envelope precursor glycoprotein gp63, recombinant cowpox virus expressing this protein was used to infect a range of cell lines derived from different species. Syncytium formation and gp63 processing were observed in all cells with the exception of LoVo cells, which are known to have a dysfunctional form of the endoprotease, furin. Furin has been shown to be necessary for the processing of a number of viral envelope glycoproteins, and gp63 contains a consensus sequence (305)Arg-Arg-Arg-Arg, which is a furin substrate motif. Pulse-chase studies demonstrated gp63 processing in Vero but not in LoVo cells. In addition it could be shown that expression of recombinant furin restored the processing of gp63 to gp46 in LoVo cells, and this resulted in syncytium formation. Our findings suggest that furin plays a pivotal role in cleavage of the HTLV-II envelope gp63, which in turn is a prerequisite for the fusogenic properties of the virus.