A highly infectious avian leukosis virus (ALV) has been molecularly cloned in a Lambda phage and sequenced. In order to manipulate the genome of this ALV and characterize the genetic determinants responsible for the high infectivity phenotype, a recombinant plasmid DNA with the two LTR provirus was constructed. Upon transfection of avian cells with this ALV DNA construct infectious viruses were produced as soon as 4 h after transfection and virus titer was 10(5) iu/ml after 24 h while that of the extensively characterized Rous sarcoma virus (RSV) was only 10(1) iu/ml. Nucleotide sequence comparison of the ALV genome with that of RSV indicates that the major differences are in the Gag gene while the Env gene is identical to that of RSV subgroup A. To map the major genetic determinants responsible for the high infectivity phenotype of this ALV, ALV/RSV chimeric viruses were constructed and their phenotype investigated. Data indicate that the high infectivity of this ALV is mainly associated with Gag and this could be due to a rapid processing of the Gag polyprotein precursor during virion assembly. Sequence analyses further suggest that this ALV isolate was generated by recombination between endogenous and exogenous viruses, and a possible mechanism of this recombination is discussed. This ALV molecular clone is presently used to develop improved helper cells and retroviral vectors for gene transfer in avian cells.