The structural and enzymatic components of retroviral cores are formed by proteolytic cleavage of precursor polypeptides, mediated by the viral protease (PR). We described previously the construction of PR-defective avian leukosis viruses. These mutant viruses are noninfectious, and their major internal components are the uncleaved gag and gag-pol polyproteins (Pr76gag and Pr180gag-pol). The reverse transcriptase (RT) activity associated with the PR-defective virions is approximately 500-fold reduced relative to that of wild-type virions, suggesting that specific cleavages activate RT activity. To gain a better understanding of the role that PR plays in the processing and activation of RT, we performed complementation experiments wherein wild-type or PR mutant gag precursors were separately coexpressed with frame-corrected wild-type or PR mutant gag-pol precursors. The results demonstrate that, as in other retrovirus systems, gag-pol precursors can be assembled into virions only when they are rescued by a gag precursor. If the gag precursor is wild type, then the rescued Pr180gag-pol is completely and properly matured, irrespective of whether its embedded PR domain is wild type or mutant. In both cases, the virions produced are fully and equally infectious. This indicates that an active-site mutation in the PR domain of the gag-pol precursor has no effect on avian leukosis virus infectivity when particles are assembled from wild-type gag precursors. In contrast, if the gag precursor has an active-site mutation in PR or is deleted for PR, then the virions are noninfectious and the gag and gag-pol precursors remain unprocessed, even if the embedded PR domain of Pr180gag-pol is wild type. Thus, in this system, virion-associated Pr180gag-pol displays no detectable cis- or trans-acting PR activity. As assayed with an exogenous template, virions with processed gag-pol polyprotein display high levels of RT activity while those with unprocessed Pr180gag-pol display greatly reduced RT activity. These results demonstrate that during virion assembly, the PR supplied by a gag precursor is both necessary and sufficient for trans-activation of RT through proteolytic maturation of copackaged gag-pol polyprotein.