The mouse mammary tumor virus (MMTV) encodes within the U3 region of the long terminal repeat (LTR) a protein known as the superantigen (Sag). Sag is needed for the efficient transmission of milk-borne virus from the gut to target tissue in the mammary gland. MMTV-infected B cells in the gut express Sag as a type II transmembrane protein that is recognized by the variable region of particular beta chains (Vβ) of the T-cell receptor (TCR) on the surface of T cells. Recognition of Sag by particular TCRs results in T-cell stimulation, release of cytokines, and amplification of MMTV infection in lymphoid cells that are needed for infection of adolescent mammary tissue. Because the C-terminal 30 to 40 amino acids of Sag are variable and correlate with recognition of particular TCR Vβ chains, we prepared a series of C-terminal Sag mutations that were introduced into a cloned infectious MMTV provirus. Virus-producing XC rat cells were used for injection of susceptible BALB/c mice, and these mice were monitored for functional Sag activity by the deletion of C3H MMTV Sag-reactive (CD4+Vβ14+) T cells. Injected mice also were analyzed for mutant infection and tumor formation in mammary glands as well as milk-borne transmission of MMTV to offspring. Most mutations abrogated Sag function, although one mutation (HPA242) that changed the negative charge of the extreme C terminus to a positive charge created a weaker Sag that slowed the kinetics of Sag-mediated T-cell deletion. Despite the lack of Sag activity, many of the sag mutant viruses were capable of sporadic infections of the mammary glands of injected mice but not of offspring mice, indicating that functional Sag increases the probability of milk-borne MMTV infection. Furthermore, although most viruses encoding nonfunctional Sags were unable to cause mammary tumors, tumors were induced by such viruses carrying mutations in a negative regulatory element that overlaps the sag gene within the LTR, suggesting that loss of Sag function may be compensated, at least partially, by loss of transcriptional suppression in certain tissues. Together these results confirm the importance of Sag for efficient milk-borne transmission and indicate that the entire C-terminal region is needed for complete Sag function.