Endoproteolytic cleavage of the glycoprotein precursor to the mature SU and TM proteins is an essential step in the maturation of retroviral glycoproteins. Cleavage of the precursor polyprotein occurs at a conserved, basic tetrapeptide sequence and is carried out by a cellular protease. The glycoprotein of the human immunodeficiency virus type 1 contains two potential cleavage sequences immediately preceding the N terminus of the TM protein. To determine the functional significance of these two potential cleavage sites, a series of mutations has been constructed in each site individually, as well as in combinations that altered both sites simultaneously. A majority of the mutations in either potential cleavage site continued to allow efficient cleavage when present alone but abrogated cleavage of the precursor when combined. Despite being transported efficiently to the cell surface, these cleavage-defective glycoproteins were unable to initiate cell-cell fusion and viruses containing them were not infectious. Viruses that contained glycoproteins with a single mutation, and that retained the ability to be processed, were capable of mediating a productive infection, although infectivity was impaired in several of these mutants. Protein analyses indicated that uncleaved glycoprotein precursors were inefficiently incorporated into virions, suggesting that cleavage of the glycoprotein may be a prerequisite to incorporation into virions. The substitution of a glutamic acid residue for a highly conserved lysine residue in the primary cleavage site (residue 510) had no effect on glycoprotein cleavage or function, even though it removed the only dibasic amino acid pair in this site. Peptide sequencing of the N terminus of gp41 produced from this mutant glycoprotein demonstrated that cleavage continued to take place at this site. These results, demonstrating that normal cleavage of the human immunodeficiency virus type 1 glycoprotein can occur when no dibasic sequence is present at the cleavage site, raise questions about the specificity of the cellular protease that mediates this cleavage and suggest that cleavage of the glycoprotein is required for efficient incorporation of the glycoprotein into virions.