The membrane-spanning domain (MSD) of a number of retroviral transmembrane (TM) glycoproteins, including those from the human and simian immunodeficiency viruses (HIV and SIV), have been predicted to contain a charged arginine residue. The wild-type SIV TM glycoprotein is 354 amino acids long. The entire putative cytoplasmic domain of SIV (amino acids 193 to 354) is dispensable for virus replication in vitro, and such truncation-containing viruses are capable of reaching wild-type titers after a short delay. We show here that further truncation of eight additional amino acids to TM185 results in a protein that lacks fusogenicity but is, nevertheless, efficiently incorporated into budding virions. By analyzing a series of nonsense mutations between amino acids 193 and 185 in Env expression vectors and in the SIVmac239 proviral clone, a region of the SIV TM that contains the minimum requirement for glycoprotein-mediated cell-to-cell fusion and that for virus replication was identified. Virus entry and infectivity were evident in truncations to a minimum of 189 amino acids, whereas cell-cell fusion was observed for a protein of only 187 amino acids. Glycoprotein was efficiently incorporated into budding virions in truncations up to 185 amino acids, indicating that such proteins are membrane anchored and are transported to the cell surface. However, truncation of the TM to 180 amino acids resulted in a protein that displays a transport defect and may be retained in the endoplasmic reticulum. Based on our analyses of these mutants, an alternative model for the MSD of SIV is proposed. Our model suggests that membrane-imbedded charged residues can be neutralized by side-chain interactions with lipid polar head groups. As a consequence, the membrane-spanning region can be reduced by more than a helical turn. This new model accounts for the ability of truncations within the predicted MSD to remain membrane anchored and maintain biological activity.