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Ovine and caprine lentiviruses are closely related genetically and antigenically although the diseases that these viruses cause in their respective host animals can vary greatly. In sheep, syndromes consist primarily of interstitial pneumonia with rare occurrences of arthritis and encephalitis, whereas in goats, the disease expresses mainly as arthritis in adult animals with rare cases of encephalitis in newborns. Experimentally, viruses from either sheep or goats can infect animals of the reciprocal species and many field strains of ovine lentivirus have biological properties similar to those of caprine viruses. However, a molecular correlation for the phenotypic differences between ovine and caprine lentivirus strains is unknown. To investigate this, we examined genetic characteristics of two phenotypically distinct North American ovine lentiviruses. Nucleotide sequence analysis of the envelope regions from virus strains 85/34 and 84/28 showed that despite significant biological differences, these viruses are closely related to each other and are genotypically more homologous to caprine arthritis-encephalitis virus (CAEV) than to visna virus of sheep. Furthermore, analysis of the nucleotide substitutions in their env regions indicated that when differences between the two ovine viruses and CAEV were found, the changes often resulted in nucleotides homologous with visna virus. These results suggest that the two field strains of ovine lentivirus may have originated from a cross-species infection of sheep by a CAEV-like virus and, evolution of their genomes toward that of ovine lentivirus may be reflective of adaptation of these viruses to the new ovine host.