For all retroviruses, the completion of the viral budding process correlates with the activation of the viral protease by an unknown mechanism, and, as the structural (Gag) polyproteins are cleaved by the viral protease, maturation of the immature virus-like particle into an infectious virion. Unlike most retroviruses, the Mason-Pfizer monkey virus Gag polyproteins assemble into immature capsids within the cytoplasm of the cell before the viral budding event. The results reported here describe a unique experimental system in which Mason-Pfizer monkey virus immature capsids are removed from the cell, and the protease is activated in vitro by the addition of a reducing agent. The cleavage of the protease from the precursor form is a primary event, which proceeds with a half time of 14 min, and is followed by authentic processing of the Gag polyproteins. Activity of the viral protease in vitro depends on pH, with an increase in catalytic rates at acidic and neutral pH. The initiation of protease activity within immature capsids in vitro demonstrates that viral protease activity is sensitive to oxidation-reduction conditions, and that the viral protease can be activated in the absence of viral budding.