The Pr76Gag and Pr180Gag-Pol polyprotein precursors of Rous sarcoma virus contain a 22-amino-acid spacer peptide, called p2, located between the amino acid sequences of the mature Gag proteins MA and p10. This spacer peptide is present in stolchiometric amounts in the virion, albeit cleaved into two parts, but its function is unknown. The primary sequence of this peptide includes a region that is highly conserved among retroviruses, consisting of four prolines followed by tyrosine. We have Investigated the role of p2, particularly the polyproline motif, in the virus life cycle by site-directed mutagenesis. Mutations in this region result in the intracellular accumulation of a truncated Gag precursor, due either to a block in the intracellular processing of the precursor or to the premature activation of the viral protease. Since in cells infected by Rous Sarcoma Virus there is no significant intracellullar processing of the Gag polyprotein precursor, our data suggest that the p2 domain plays a role in controlling the activation of the protease. These mutations also result in a reduction in virus particle release, probably as a direct consequence of the aberrant precursor processing since a construct In with both p2 and the protease active site were mutated did not exhibit aberrant processing of the Gag polyproteins and formed particles with an efficiency similar to that of the wild type. This indicates that it is the viral protease that is responsible for the aberrant processing and suggests that the p2 region is not required for assembly. Although the virus genomic RNA packaged Into virions produced by the p2 mutants is more susceptible to degradation, it appears that the p2 domain does not have a direct role in RNA packaging and protection.