The wild mouse ecotropic retrovirus, Cas-Br-E, induces progressive, noninflammatory spongiform neurodegenerative disease in susceptible mice. Functional genetic analysis of the Cas-Br-E genome indicates that neurovirulence maps to the env gene, which encodes the surface glycoprotein responsible for binding and fusion of virus to host cells. To understand how the envelope protein might be involved in the induction of disease, we examined the regional and temporal expression of Cas-Br-E Env protein in the central nervous systems (CNS) of mice infected with the highly neurovirulent chimeric virus FrCas(E). We observed that multiple isoforms of Cas-Br-E Env were expressed in the CNS, with different brain regions exhibiting unique patterns of processed Env glycoprotein. Specifically, the expression of gp70 correlated with regions showing microglial infection and spongiform neurodegeneration. In contrast, regions high in neuronal infection and without neurodegenerative changes (the cerebellum and olfactory bulb) were characterized by a gp65 Env protein isoform. Sedimentation analysis of brain region extracts indicated that gp65 rather than gp70 was incorporated into virions. Biochemical analysis of the Cas-Br-E Env isoforms indicated that they result from differential processing of N-linked sugars. Taken together, these results indicate that differential posttranslational modification of the Cas-Br-E Env is associated with a failure to incorporate certain Env isoforms into virions in vivo, suggesting that defective viral assembly may be associated with the induction of spongiform neurodegeneration.