In this study, specific signals known to mediate endoplasmic reticulum or Golgi localization of transmembrane proteins have been transferred to the human immunodeficiency virus type 1 (HIV-1) env gene product. The intracellularly retained recombinant glycoproteins were not proteolytically processed to gp120 and gp41, which is further evidence that this process occurs at a later stage in the transport pathway, presumably within or near the trans-Golgi network. Since the subcellular localization of the viral glycoproteins of enveloped viruses can be one of the factors determining the cellular site of particle assembly and release, experiments were performed to determine if this property was altered by coexpression of the recombinant HIV-1 glycoproteins. When wild-type virus was compared to mutant virus encoding the intracellularly retained glycoproteins, the extent of HIV-1 particle release into the extracellular medium remained unaffected, and electron-microscopic analysis did not reveal any significant alteration in the cellular sites of particle assembly and budding. Thus, in COS-7 cells, altered subcellular localization of the viral glycoprotein does not exert a dominant influence on the assembly site of the HIV-1 particle.