Studies of the retroviruses have focused on the specific interaction of the nucleocapsid protein with a packaging signal in the viral RNA as important for this selectivity, but the packaging signal in porcine endogenous retrovirus (PERV) has not been defined. Herein, we identified and analyzed this packaging signal in PERV and found hairpin structures with conserved tetranucleotides in their loops and nucleocapsid recognition sequences; both of which are key elements in the viral packaging signal of MLV. We evaluated packaging efficiency of sequence variants isolated from viral and proviral integrated genomes. All viral packaging sequences (Ψ) were identical, while five distinct packaging sequences were identified from proviral sources. One proviral sequence (Ψ1) was identical to that of the viral Ψ and had the highest packaging efficiency. Three variants (Ψ2, Ψ3, Ψ4) maintained key elements of the viral packaging signal, but had nucleotide replacements and consequently demonstrated reduced packaging efficiency. Despite of the same overall hairpin structure, the proviral variant (Ψ5) had only one GACG sequence in the hairpin loop and showed the lowest packaging efficiency other than ΔΨ, in which the essential packaging sequence was removed. This result, thus, defined the packaging sequences in PERV and emphasized the importance of nucleotide sequence and RNA structure in the determination of packaging efficiency. In addition, we demonstrate efficient infection and gene expression from the PERVbased viral vector, which may serve as a novel alternative to current retroviral expression systems.