The encapsidation signal of bovine leukemia virus (BLV) was previously shown by deletion analysis to be discontinuous and to extend into the 5' end of the gag gene (L. Mansky et al., J. Virol. 69:3282-3289, 1995). The global minimum-energy optimal folding for the entire BLV RNA, including the previously mapped primary and secondary encapsidation signal regions, was analyzed. Two stable stem-loop structures (located just downstream of the gag start codon) were predicted within the primary signal region, and one stable stem-loop structure (in the gag gene) was predicted in the secondary signal region. Based on these predicted structures, we introduced a series of mutations into the primary and secondary encapsidation signals in order to explore the sequence and structural information contained within these regions. The replication efficiency and levels of cytoplasmic and virion RNA were analyzed for these mutants. Mutations that disrupted either or both of the predicted stem-loop structures of the primary signal reduced the replication efficiency by factors of 7 and 40, respectively; similar reductions in RNA encapsidation efficiency were observed. The mutant with both stem-loop structures disrupted had a phenotype similar to that of a mutant containing a deletion of the entire primary signal region. Mutations that disrupted the predicted stem-loop structure of the secondary signal led to similar reductions (factors of 4 to 6) in both the replication and RNA encapsidation efficiencies. The introduction of compensatory mutations into mutants from both the primary and secondary signal regions, which restored the predicted stem-loop structures, led to levels of replication and RNA encapsidation comparable to those of virus containing the wild-type encapsidation signal. Replacement of the BLV RNA region containing the primary and secondary encapsidation signals with a similar region from human T-cell leukemia virus (HTLV) type 1 or type 2 led to virus replication at three-quarters or one-fifth of the level of the parental virus, respectively. The results from both the compensatory mutants and BLV-HTLV chimeras indicate that the encapsidation sequences are recognized largely by their secondary or tertiary structures.