Mouse mammary tumor virus (MMTV) is a complex murine retrovirus that encodes an HIV Rev-like export protein, Rem, from a doubly spliced version of envelope (Env) mRNA. Previously, the Nterminal 98-amino acid sequence of Rem, which is identical to Env signal peptide (SP), and full-length Rem were shown to be functional in a reporter assay that measures a postexport function. Here we show that MMTV-infected cells or cells transfected with rem or env cDNAs express SP, which is the active component in the reporter assay. Uncleaved Rem was partially glycosylated, but mutations in both glycosylation sites within the C terminus prevented Rem function. Mutations that reduced Rem or Env cleavage by signal peptidase greatly reduced SP levels and functional activity in the reporter assay and allowed accumulation of the uncleaved protein. Fluorescence microscopy revealed that GFP-tagged cleavagesite mutants are unstable and lack fluorescence compared with wild-type Rem, suggesting improper folding. Proteasome inhibitors allowed accumulation of uncleaved Rem relative to SP and increased reporter activity, consistent with SP retrotranslocation and proteasome escape before nuclear entry. Expression of a dominant-negative p97 ATPase did not alter levels of unprocessed Rem and SP but decreased reporter activity, suggesting p97-facilitated retrotranslocation of SP. Our results provide an example of a SP that is processed by signal peptidase and retrotranslocated to allow nuclear localization and function. mouse mammary tumor virus | retrotranslocation | retrovirus | signal peptide | ERAD M ouse mammary tumor virus (MMTV) has provided many insights into cell and cancer biology. MMTV is a complex mouse retrovirus with regulatory features similar to those found in human complex retroviruses, such as HIV and human T-cell leukemia virus (HTLV) (1). These features include the ability to manipulate the immune system and to produce a doubly spliced mRNA encoding a protein (Rem) functionally similar to HIV Rev (1, 2). Rem mRNA is translated in the same reading frame as the MMTV envelope (env) gene but has a deletion of internal sequences encoding the surface (SU) and transmembrane (TM) proteins (1, 2) (Fig. 1A).MMTV Rem is a 301-amino acid protein that regulates expression and export of full-length viral RNA from the nucleus to the cytoplasm using the Crm1 export pathway (1, 2). The Rem protein contains several Rev-like motifs, including a nuclear localization signal (NLS), a nucleolar localization sequence, an arginine-rich RNA-binding motif, and a leucine-rich nuclear export sequence (Fig. 1A). These motifs map to the N-terminal 98 amino acids, which are identical in sequence to the signal peptide (SP) of the MMTV Env protein (1, 2). Similar to HIV Rev or HTLV-1 Rex (3, 4), GFP fusions to Rem or the SP are localized to nucleoli. Both GFPRem and GFP-SP fusions are functional in a reporter assay that measures a postexport function (e.g., translation) (5). Rem-dependent reporter activity requires the NLS as well as the presence of a Rem-re...