The retroviral nucleocapsid protein (NC) originates by cleavage of the Gag polyprotein. It is highly basic and contains one or two zinc fingers. Mutations in either the basic residues or the zinc fingers can affect several events of the virus life cycle. They frequently prevent the specific packaging of the viral RNA, affect reverse transcription, and impair virion assembly. In this work, we explore the role of NC in murine leukemia virus (MLV) particle assembly and release. A panel of NC mutants, including mutants of the zinc finger and of a basic region, as well as truncations of the NC domain of Gag, were studied. Several of these mutations dramatically reduce the release of virus particles. A mutant completely lacking the NC domain is apparently incapable of assembling into particles, although its Gag protein is still targeted to the plasma membrane. By electron microscopy on thin sections of virus-producing cells, we observed that some NC mutants exhibit various stages of budding defects at the plasma membrane and have aberrant particle morphology; electron micrographs of cells expressing some of these mutants are strikingly similar to those of cells expressing "late-domain" mutants. However, the defects of NC mutants with respect to virus release and infectivity could be complemented by an MLV lacking the p12 domain. Therefore, the functions of NC in virus budding and infectivity are completely distinct from viral late-domain function.