Jaagsiekte sheep retrovirus (JSRV) and enzootic nasal tumor virus (ENTV) are simple betaretroviruses that cause epithelial cell tumors in the lower and upper airways of sheep and goats. The envelope (Env) glycoproteins of both viruses can transform rodent and chicken fibroblasts, indicating that they play an essential role in oncogenesis. Previous studies found that a YXXM motif in the Env cytoplasmic tail, a putative docking site for phosphatidylinositol 3-kinase (PI3K) after tyrosine phosphorylation, was necessary for rodent cell transformation but was not required for transformation of DF-1 chicken fibroblasts. Here we show that JSRV and ENTV Env proteins with tyrosine or methionine mutations in the YXXM motif can still transform rodent fibroblasts, albeit with reduced efficiency. Akt was activated in cells transformed by JSRV or ENTV Env proteins and in cells transformed by the proteins with tyrosine mutations. Furthermore, the PI3K-specific inhibitor LY294002 could inhibit Akt activation and cell transformation in all cases, indicating that Akt activation and transformation is PI3K dependent. However, we could not detect tyrosine phosphorylation of JSRV or ENTV Env proteins or an interaction between the Env proteins and PI3K in the transformed cells. We found no evidence for mitogen-activated protein kinase activation in cells that were transformed by the JSRV or ENTV Env proteins. We conclude that ovine betaretrovirus Env proteins transform the rodent fibroblasts by indirectly activating the PI3K/Akt pathway.