The sequence of 2,191 nucleotides encoding the env gene of murine retrovirus Akv was determined by using a molecular clone of the Akv provirus. Deduction of the encoded amino acid sequence showed that a single open reading frame encodes a 638-amino acid precursor to gp70 and p15E. In addition, there is a typical leader sequence preceding the amino terminus of gp70. The locations of potential glycosylation sites and other structural features indicate that the entire gp70 molecule and most of p15E are located on the outer side of the membrane. Internal cleavage of the env precursor to generate gp70 and p15E occurs immediately adjacent to several basic amino acids at the carboxyl terminus of gp70. This cleavage generates a region of 42 uncharged, relatively hydrophobic amino acids at the amino terminus of p15E, which is located in a position analogous to the hydrophobic membrane fusion sequence of influenza virus hemagglutinin. The mature polypeptides are predicted to associate with the membrane via a region of 30 uncharged, mostly hydrophobic amino acids located near the carboxyl terminus of p15E. Distal to this membrane association region is a sequence of 35 amino acids at the carboxyl terminus of the env precursor, which is predicted to be located on the inner side of the membrane. By analogy to Moloney murine leukemia virus, a proteolytic cleavage in this region removes the terminal 19 amino acids, thus generating the carboxyl terminus of p15E. This leaves 15 amino acids at the carboxyl terminus of p15E on the inner side of the membrane in a position to interact with virion cores during budding. The precise location and order of the large RNase T(1)-resistant oligonucleotides in the env region were determined and compared with those from several leukemogenic viruses of AKR origin. This permitted a determination of how the differences in the leukemogenic viruses affect the primary structure of the env gene products.