Many murine leukemia viruses (MLVs) are partially resistant to restriction by mouse APOBEC3 (mA3) and essentially fully resistant to induction of G-to-A mutations by mA3. In contrast, Vif-deficient HIV-1 (?Vif HIV-1) is profoundly restricted by mA3, and the restriction includes high levels of G-to-A mutation. Human APOBEC3G (hA3G), unlike mA3, is fully active against MLVs. We produced a glutathione S-transferase-mA3 fusion protein in insect cells and demonstrated that it possesses cytidine deaminase activity, as expected. This activity is localized within the N-terminal domain of this 2-domain protein; the C-terminal domain is enzymatically inactive but required for mA3 encapsidation into retrovirus particles. We found that a specific arginine residue and several aromatic residues, as well as the zinc-coordinating cysteines in the C-terminal domain, are necessary for mA3 packaging; a structural model of this domain suggests that these residues line a potential nucleic acid-binding interface. Mutation of a few potential phosphorylation sites in mA3 drastically reduces its antiviral activity by impairing either deaminase activity or its encapsidation. mA3 deaminates short single-stranded DNA oligonucleotides preferentially toward their 3' ends, whereas hA3G exhibits the opposite polarity. However, when packaged into infectious ?Vif HIV-1 virions, both mA3 and hA3G preferentially induce deaminations toward the 5' end of minus-strand viral DNA, presumably because of the sequence of events during reverse transcription in vivo. Despite the fact that mA3 in MLV particles does not induce detectable deaminations upon infection, its deaminase activity is easily detected in virus lysates. We still do not understand how MLV resists mA3-induced G-to-A mutation. IMPORTANCE: One way that mammalian cells defend themselves against infection by retroviruses is with APOBEC3 proteins. These proteins convert cytidine bases to uridine bases in retroviral DNA. However, mouse APOBEC3 protein blocks infection by murine leukemia viruses without catalyzing this base change, and the mechanism of inhibition is not understood in this case. We have produced recombinant mouse APOBEC3 protein for the first time and characterized it here in a number of ways. Our mutational studies shed light on the mechanism by which mouse APOBEC3 protein is incorporated into retrovirus particles. While mouse APOBEC3 does not catalyze base changes in murine leukemia virus DNA, it can be recovered from these virus particles in enzymatically active form; it is still not clear why it fails to induce base changes when these viruses infect new cells.