Intracisternal A-particle retrotransposons (IAPs) are retroviruslike elements that are defective in envelope protein synthesis and exist without an extracellular stage. We have isolated a novel class of cDNAs that are related to known IAP elements in the nucleotide and deduced protein sequence of gag and pol genes but also contain a previously unidentified reading frame between the pol gene and putative U3 region. Analysis of the deduced protein sequence reveals features of the putative protein that are characteristic of retroviral envelope proteins. The isolated cDNAs represent transcripts of multiple retroid elements in the mouse genome that were termed IAPE (intracisternal A-particle-related elements coding for envelope). IAPE env genes exist in approximately 200 copies per haploid genome as integral parts of the majority of these retroid elements. Four major IAPE subgroups could be distinguished after EcoRI digestion of genomic DNA.