The Friend spleen focus-forming virus (SFFV) env gene encodes a 409-amino-acid glycoprotein with an apparent M_r of 55,000 (gp55) that binds to erythropoietin receptors (EpoR) to stimulate erythroblastosis. We reported previously the in vivo selection during serial passages in mice of several evolutionary intermediates that culminated in the formation of a novel SFFV (M. E. Hoatlin, E. Gomez-Lucia, F. Lilly, J. H. Beckstead, and D. Kabat, J. Virol. 72:3602-3609, 1998). A mouse injected with a retroviral vector in the presence of a nonpathogenic helper virus developed long-latency erythroblastosis, and subsequent viral passages resulted in more pathogenic isolates. The viruses taken from these mice converted an erythropoietin-dependent cell line (BaF3/EpoR) into factor-independent derivatives. Western blot analysis of cell extracts with an antiserum that broadly reacts with murine retroviral envelope glycoproteins suggested that the spleen from the initial mouse with mild erythoblastosis contained an array of viral components that were capable of activating EpoR. DNA sequence analysis of the viral genomes cloned from different factor-independent cell clones revealed env genes with open reading frames encoding 644, 449, and 187 amino acids. All three env genes contained 3' regions identical to that of SFFV, including a 6-bp duplication and a single-base insertion that have been shown previously to be critical for pathogenesis. However, the three env gene sequences did not contain any polytropic sequences and were divergent in their 5' regions, suggesting that they had originated by recombination and partial deletions of endogenously inherited MuLV env sequences. These results suggest that the requirements for EpoR activation by SFFV-related viruses are dependent on sequences at the 3' end of the env gene and not on the polytropic regions or on the 585-base deletions that are common among the classical strains of SFFV. Moreover, sequence analysis of the different recombinants and deletion mutants revealed that short direct and indirect repeat sequences frequently flanked the deletions that had occurred, suggesting a reverse transcriptase template jumping mechanism for this rapid retroviral diversification.