Jaagsiekte sheep retrovirus (JSRV) envelope (Env) is an active oncogene responsible for neoplastic transformation in animals and cultured cells. In this study, we used syncytium induction and fluorescence-based cell fusion assays to investigate JSRV Env fusion and its modulation by the cytoplasmic tail (CT). We found that JSRV Env induced syncytia in cells overexpressing the receptor for JSRV and that a low pH was required for this process to occur. Fusion kinetics studies revealed that cell-cell fusion by JSRV Env at neutral pH was poor, taking up to a day, in sharp contrast to fusion at low pH, which peaked within 2 min following a low-pH trigger. Deletion of the C-terminal 7 or 16 amino acids of the JSRV Env CT had no or little effect on fusion, yet additional truncation toward the membrane-spanning domain, resulting in mutants retaining as little as 1 amino acid of the CT, led to progressively increased syncytium formation at neutral pH that was further enhanced by low-pH treatment. Notably, the severely truncated mutants showed elevated levels of surface subunits in culture medium, suggesting that the CT truncations resulted in conformational changes in the ectodomain of Env that impaired surface subunit associations. Taken together, this study reveals for the first time that the fusion activity of the JSRV Env protein is dependent on a low pH and is modulated by the CT, whose truncation overcomes, at least partially, the low-pH requirement for fusion and enhances Env fusion activity and kinetics.