Foamy viruses (FV) are unusual retroviruses that differ in many aspects of their life cycle from the orthoretroviruses such as human immunodeficiency virus. Similar to Mason–Pfizer monkey virus (MPMV), FV assemble into capsids intracellularly. The capsids are then transported to a cellular membrane for acquisition of envelope (Env) glycoproteins and budding. However, unlike MPMV, budding of FV is dependent upon the presence of Env. Previous work suggested that FV Env proteins are localized to the endoplasmic reticulum (ER) where budding takes place. However, very little was known about the details of FV assembly. We have used immunofluorescence and electron microscopy to visualize the intracellular location of FV assembly and budding. We have found that, as in the case of MPMV, FV capsids assemble at a pericentriolar site in the cytoplasm. Surprisingly, FV Env is mostly absent from this site and, contrary to expectations, FV capsid structural protein (Gag) is absent from the ER. Gag and Env only co-localize at the trans-Golgi network, suggesting that Env–Gag interactions that are required for viral egress from the cell, occurs at this site. Finally, inhibitor studies suggest an important role of microtubule networks for foamy viral assembly and budding.