To provide a system for investigating the effects of the JSRV envelope protein on its target cell, we report here on the isolation and extended culture (ie, 7 to 14 days) of primary sheep ATII cells, and their infection by JSRV. The maintenance of the cells in culture led to a homogeneous population of proliferating ATII cells with numerous lamellar bodies, well-organized microvilli, apical/basolateral polarity, and prominent tight junctions. Moreover, the cells exhibited high levels of agonist-induced surfactant lipid secretion. Primary ATII cells also could be infected using the JSRV molecular clone JSRVJS7, demonstrating that the cultured cells expressed the specific receptor for JSRV, described as hyaluronidase-2. Furthermore, the viral genome was shown to be transcribed and translated as demonstrated by reverse transcriptase activity in the supernatant of virus-adsorbed cells. The examination of the effects of the JSRV envelope protein expressed in primary ATII cells and its role in ovine pulmonary adenocarcinoma is the current focus of our work.