We used a replication-competent retrovirus shuttle vector based on a DNA clone of the Schmidt-Ruppin A strain of Rous sarcoma virus to characterize rearrangements in circular viral DNA. In this system, circular molecules of viral DNA present after acute infection of cultured cells were cloned as plasmids directly into bacteria. The use of a replication-competent shuttle vector permitted convenient isolation of a large number of viral DNA clones; in this study, over 1,000 clones were analyzed. The circular DNA molecules could be placed into a limited number of categories. Approximately one-third of the rescued molecules had deletions in which one boundary was very near the edge of a long terminal repeat (LTR) unit. Subtle differences in the patterns of deletions in circular DNAs with one versus two copies of the LTR sequence were observed, and differences between deletions emanating from the right and left boundaries of the LTR were seen. A virus with a missense mutation in the region of the pol gene responsible for integration and exhibiting a temperature sensitivity phenotype for replication had a marked decrease in the number of rescued molecules with LTR-associated deletions when infection was performed at the nonpermissive temperature. This result suggests that determinants in the pol gene, possibly in the integration protein, play a role in the generation of LTR-associated deletions. Sequences in a second region of the genome, probably within the viral gag gene, were also found to affect the types of circular viral DNA molecules present after infection. Sequences in this region from different strains of avian sarcoma-leukosis viruses influenced the fraction of circular molecules with LTR-associated deletions, as well as the relative proportion of circular molecules with either one or two copies of the LTR. Thus, the profile of rearrangements in unintegrated viral DNA is complex and dependent upon the nature of sequences in the gag and pol regions.