By deletion mutagenesis analyses, we have examined the contribution of the immunosuppressive peptide (ISP) region within the transmembrane (TM) protein of Mason-Pfizer monkey virus to viral maturation and infectivity. Deletion of the entire region (mutant D105) results in the production of an Env precursor that is transport defective and therefore unable to be processed to mature glycoproteins. This mutation results in the release of noninfectious virions devoid of surface glycoproteins. A second deletion that removes the most highly conserved 11 amino acids of the ISP (mutant D33) does not affect the production, transport, or processing of the Env precursor yet produces virions that are noninfectious. The mutation was shown to cause the loss of interaction between the surface (SU) and TM proteins and result in the efficient shedding of gp70 into the culture medium. The released gp70 protein was biologically active and could still bind with high specificity to susceptible target cells. Since the ISP domain may represent an area of contact between SU and TM, it could provide an additional explanation for the amino acid sequence homology observed within this region of a variety of retroviruses.