The koala retrovirus (KoRV) is a gammaretrovirus closely related to the gibbon ape leukemia virus and induces leukemias and immune deficiencies associated with opportunistic infections, such as chlamydiosis. Here we characterize a KoRV newly isolated from an animal in a German zoo and show infection of human and rat cell lines in vitro and of rats in vivo, using immunological and PCR methods for virus detection. The KoRV transmembrane envelope protein (p15E) was cloned and expressed, and p15E-specific neutralizing antibodies able to prevent virus infection in vitro were developed. Finally, evidence for immunosuppressive properties of the KoRV was obtained.