Ovine pulmonary adenomatosis (OPA) is caused by jaagsiekte sheep retrovirus (JSRV) and is a chronic, progressive, and infectious neoplastic lung disease in sheep, which causes significant economic losses to the sheep industry. Neither a vaccine nor serological diagnostic methods to detect OPA are available. We performed a JSRV infection survey in sheep using blood samples (n = 1,372) collected in the three northeastern provinces of China (i.e., Inner Mongolia, Heilongjiang, and Jilin) to determine JSRV infection status in sheep herds using a real-time PCR assay targeting the gag gene of JSRV. The ovine endogenous retrovirus sequence was successfully amplified in all sheep samples tested (296 from the Inner Mongolia Autonomous Region, 255 from Jilin province, and 821 from Heilongjiang province). Subsequently, we attempted to distinguish exogenous JSRV (exJSRV) and endogenous JSRV (enJSRV) infections in these JSRV-positive samples using a combination assay that identifies a ScaI restriction site in an amplified 229-bp fragment of the gag gene of JSRV and a "LHMKYXXM" motif in the cytoplasmic tail region of the JSRV envelope protein. The ScaI restriction site is present in all known oncogenic JSRVs but absent in ovine endogenous retroviruses, while the "LHMKYXXM" motif is in all known exJSRVs but not in enJSRVs. Interestingly, one JSRV strain (HH13) from Heilongjiang province contained the "LHMKYXXM" motif but not the ScaI enzyme site. Phylogenetic analysis showed that strain HH13 was closely related to strain enJSRV-21 reported in the USA, indicating that HH13 could be an exogenous virus. Our results provide valuable information for further research on the genetic evolution and pathogenesis of JSRV.