The nucleotide sequence of a near-terminal region of orf virus DNA was determined. Examination of the sequence revealed an open reading frame encoding a peptide with significant amino acid homology to the pseudoprotease domains recently identified in a number of retroviruses including mouse mammary tumor virus, simian Mason-Pfizer virus, maedi-visna virus, and equine infectious anaemia virus. The orf virus pseudoprotease shares up to 28% amino acid homology with retroviral pseudoproteases and appears to be a discrete transcriptional unit rather than a subunit of a larger polypeptide as is the case in retroviruses. The sharing of amino acid composition across such wide taxonomic boundaries suggests that this polypeptide has a functional significance in both retroviruses and poxviruses.