In polarized epithelial cells, the assembly and release of human immunodeficiency virus type 1 (HIV-1) occur at the basolateral side of the plasma membrane, and the site of assembly is determined by the site of expression of the Env protein. In order to investigate whether the expression of the Env proteins exclusively in the endoplasmic reticulum (ER) can alter the site of virus assembly, we coexpressed the simian immunodeficiency virus (SIV) Gag protein and mutant SIV Env proteins having an ER retrieval signal (KKXX motif). In cells expressing the wild-type (wt) Env protein or coexpressing Env and Gag proteins, the Env protein was processed into the surface (SU) and transmembrane (TM) proteins. In contrast, in cells expressing the mutant Env proteins alone or in combination with Gag, the Env proteins were retrieved to the ER and were not proteolytically processed. Coexpression of the Gag and ER-retained mutant Env proteins resulted in a transient decrease in the release of the Gag protein into the medium, suggesting an interaction between the Gag and ER-retrieved Env proteins. Using saponin-permeabilized cells coexpressing Gag and Env proteins, we obtained further evidence for Env-Gag interaction. A monoclonal antibody specific to the SIV Gag protein was found to coimmunoprecipitate both the Gag and Env proteins. The interaction was specific, as coexpressed SIV Env proteins without the cytoplasmic tail or a chimeric HIV-1 Env proteins with the CD4 cytoplasmic tail were not coimmunoprecipitated by the Gag-specific antibody. Electron microscopic analyses indicated that assembly of virus particles occurred only at the surfaces of cells in which the Gag protein was coexpressed with either the wt or ER-retrieved mutant Env protein. These data indicate that although the Env and Gag proteins interact intracellularly, the site of assembly of SIV is not redirected to an intracellular organelle by the retrieval of the Env protein to the ER.