The presence of budding C-type and intracytoplasmic A-type particles in Chinese hamster ovary (CHO) cells is well documented. However, extensive screening has failed to detect any evidence of infectivity. To investigate the origin and expression of these particles, retrovirus-like sequences which are actively transcribed in CHO cells have been cloned and characterized. Two families of sequences related to intracisternal A-particle (IAP) genomes of mice and Syrian hamsters were identified in cytoplasmic RNA from CHO cells (CHO IAP family I and family II). None of the four clones which were sequenced exhibited intact gag, pol, or env open reading frames. Only IAP family II sequences were present in purified extracellular particles of CHO cells. Several cDNA sequences related to mammalian C-type retrovirus genomes were isolated and cloned from gradient-purified, extracellular particles of recombinant CHO cells. All were homologous to the conserved endonuclease domain of murine leukemia virus. Nucleotide sequence analysis of the largest cDNA revealed multiple interruptions of the endonuclease encoding reading frame providing one possible explanation for the non-infectious nature of the particles observed in CHO cells. Both types of retrovirus-like sequences identified in purified extracellular particles of CHO cells (CHO IAP family II and C-type) were present as conserved, moderately repetitive sequences in DNA of all CHO cell lines examined, as well as in DNA from a Chinese hamster liver. It is therefore likely that the extracellular retrovirus-like particles of CHO cells are the products of endogenous provirus elements present in the germline of Chinese hamsters.