A combination of biological and molecular techniques permitted us to identify that a 4.9kb replication defective(def) recombinant murine leukemia virus, present in the LPBM5 murine leukemia virus complex, as the proximal cause of a syndrome, murine AIDS (MAIDS), manifested by lymphoproliferation and immunodeficiency. Molecular cloning and sequence analysis revealed that the defective virus has a functional LTR and the gag gene is intact. The other two genes i.e pol and env are severely deleted. Within the gag gene p10 and p30 are very closely related to replication competent helper ecotropic virus whereas the p15 and p12 are most divergent. A 100bp probe was developed from the p12 region and used to follow the infection in animals. The presence of defective genome could be demonstrated 2 wk after infection in sensitive C57BL/6 mice, whereas such genomes were absent from the tissues of resistant A/J mice even after 12 wk of infection. Late stage MAIDS is regularly associated with clonal expansion of B cells. Using a potentially more sensitive assay for the presence of transformed cells by transferring cells from MAIDS mice to mice with scid mutation, we have been able to show that a) transferrable tumors are present in tissues of mice beginning 12 wk post infection; b) tumor types present include CD4+ T cell as well as pre-B and B cell lymphomas; c) both T and B lineage lymphomas may occur in a single mouse; d) the tumors are clonal for J(H) or T cell receptor gene rearrangements and e) most if not all tumors have clonal integrations of the BM5 def genome. Bacterially expressed p12 gag induced high levels of antibodies in both susceptible and resistant mice but failed to induce a protective immune response. We developed a pathogenic defective virus containing a bacterial neomycin resistant gene which will facilitate quantification of the virus, in situ hybridization study to determine the initial target cell(s) and further generation of mutant viruses to determine the role of various gag proteins. Transgenic mice containing the entire gag gene of the def. virus under the control of SV40 promoter and immunoglobulin heavy chain enhancer were developed. Such mice may prove useful in understanding the role of gag in disease development.