The ovine betaretroviruses jaagsiekte sheep retrovirus (JSRV) and enzootic nasal tumor virus (ENTV) cause contagious cancers in the lungs and upper airways of sheep and goats. Oncogenic transformation assays using mouse and rat fibroblasts have localized the transforming activity to the Env proteins encoded by these viruses, which require the putative lung and breast cancer tumor suppressor hyaluronidase 2 (Hyal2) to promote virus entry into cells. These results suggested the hypothesis that the JSRV and ENTV Env proteins cause cancer by inhibiting the tumor suppressor activity of Hyal2. Consistent with this hypothesis, we show that human Hyal2 and other Hyal2 orthologs that can promote virus entry, including rat Hyal2, can suppress transformation by the Env proteins of JSRV and ENTV. Furthermore, we provide direct evidence for binding of the surface (SU) region of JSRV Env to human and rat Hyal2. However, mouse Hyal2 did not mediate entry of virions bearing JSRV or ENTV Env proteins, bound JSRV SU poorly if at all, and did not suppress transformation by the JSRV or ENTV Env proteins, indicating that mouse Hyal2 plays no role in transformation of mouse fibroblasts and that the Env proteins can transform at least some cells by a Hyal2-independent mechanism. Expression of human Hyal2 in mouse cells expressing JSRV Env caused a marked reduction in Env protein levels, indicating that human Hyal2 suppresses Env-mediated transformation in mouse cells by increasing Env degradation rather than by exerting a more general Env-independent tumor suppressor activity.