Cytoplasmic transport of Gag molecules to the site of budding is an important but poorly understand process in retroviral assembly. Our previous studies of MasonPfizer monkey virus showed that, for this retrovirus, Gag is assembled into capsids at a pericentriolar region and that Env is necessary for efficient transport out of the site. An Env requirement for cytoplasmic transport implicates vesicular trafficking in this process even though the capsids remain cytoplasmic and do not bud into intracellular compartments in the cells studied to date. We show here that the secretory pathway of the cell is not directly involved in Gag transport since the latter was not inhibited by BFA, nor did Gag colocalize with markers of the ER, Golgi, or TGN. Instead, colocalization was observed between Gag and endocytosed transferrin and with Rab11, suggesting that pericentriolar recycling endosomes play a critical role in this process. Mutants of Rab11 that inhibit efflux of transferrin from the recycling endosome also inhibited Gag transport. Our studies show that Env colocalizes with Gag at the pericentriolar assembly site, and provide evidence that Env must travel through this compartment in order to initiate export of the capsids from the site of assembly. Thus, for the first time, endocytic trafficking of a retroviral Env glycoprotein is linked to the efficient cytoplasmic transport of Gag. Mason-Pfizer monkey virus (M-PMV), the prototypic D-type retrovirus, is characterized by assembly of spherical immature capsids in the cytoplasm (1-3). The cytoplasmic assembly of M-PMV is directed by an 18-amino acid sequence within the MA domain, termed the cytoplasmic targeting/retention signal (CTRS). Despite the presence of the bipartite plasma membrane targeting signal found in retroviral Gag molecules that assemble at the periphery of the cell, the CTRS acts in a dominant manner. Our previous studies (4) suggest that the CTRS functions in a cotranslational manner to interact with the dynein/dynactin molecular motor complex and transport nascent Gag molecules, along with the polysome, to the pericentriolar region of the cell.This region of the cell provides an advantageous location for translation and assembly of M-PMV capsids. The region is host to many chaperonins, including TRiC, which has been demonstrated to participate in M-PMV capsid assembly (5). Additionally, the region serves as the microtubule-organizing center (MTOC) that is responsible for anchoring many of the cell's organelles. Thus, the pericentriolar assembly site of this virus provides an optimal location for protein folding as well as for interactions with cytoskeletal and vesicular components of the cell. This is important because in the accompanying paper we show that efficient transport of assembled M-PMV capsids from the pericentriolar region requires coexpression of the M-PMV Env protein and functional vesicular trafficking. In the absence of Env or under conditions of a low temperature (20°C) block to vesicular transport (6,7) Gag accumulated at the assemb...