The capsid domain (CA) of the retroviral Gag protein is a major constituent of the virion core. To examine the role of this protein in M-MuLV morphogenesis and replication, a series of substitution mutations affecting the central region of CA were introduced into an infectious proviral DNA. The altered DNAs were introduced into cells, and the resulting lines were analyzed for production of infectious virions. Only one of the replication defective mutants analyzed was blocked in virion assembly. The remaining mutant DNAs induced the formation and release of particles containing genomic RNA and polymerase protein. The reverse transcriptase associated with these mutant virions was capable of transcribing both minus strand strong stop and extended DNA products using the endogenous genomic RNA as template in vitro. Upon infection of fresh cells, however, no viral DNA synthesis could be detected either by Southern analysis or by an RNase protection assay developed specifically to detect intermediate products of reverse transcription. The results indicate that the bulk of the CA mutants are blocked before reverse transcription of the viral genome and suggest an important role for the capsid protein in an early stage of viral replication. (C) 1996 Academic Press, Inc.