The mammary gland specific, glucocorticoid controlled expression of MMTV makes it an ideal candidate for the basis of a nonpromiscuous regulated retroviral vector system. We have previously constructed an MMTV proviral variant that gives rise to virus particles upon introduction into cultured cells. This was used to construct a defective MMTV provirus in which the MMTV env gene was replaced by the neomycin resistance gene under the control of the herpes simplex thymidine kinase promotor. The defective provirus was packaged after transfection into two distinct MMTV producing cell lines. Conditioned medium from these cells contains virus particles which are able to infect cells of fibroblast and epithelial origin and to confer neomycin resistance upon them. This indicates that the defective MMTV provirus contains the sequences required for packaging of the genomic viral RNA. Transfection of the same MMTV-neo recombinant provirus into the MoMLV packaging cell line, psi 2, did not result in any infectious virus particles. Thus the packaging signals for MMTV and MoMLV appear to be distinct. Analysis of the MMTV infected cells reveals the presence of the MMTV-neo recombinant provirus. Expression of both MMTV and neomycin is detectable and augmented when the infected cells are grown in the presence of glucocorticoid hormone.