Background Retrovirus-induced tumors develop in a broad range of frequencies and after extremely variable periods of time, from only a few days to several decades, depending mainly on virus type. For hitherto unexplained reasons, deltaretroviruses cause hematological malignancies only in a minority of naturally infected organisms and after a very prolonged period of clinical latency. Results Here we demonstrate that the development of malignancies in sheep experimentally infected with the deltaretrovirus bovine leukemia virus (BLV) depends only on the level of BLV replication. Animals were experimentally infected with leukemogenic or attenuated, but infectious, BLV molecular clones and monitored prospectively through 8 months for viral replication. As early as 2 weeks after infection and subsequently at any time during follow-up, leukemogenic viruses produced significantly higher absolute levels of reverse transcription (RT), clonal expansion of infected cells, and circulating proviruses with RT- and somatic-dependent mutations than attenuated viruses. These differences were only quantitative, and both kinds of viruses triggered parallel temporal fluctuations of host lymphoid cells, viral loads, infected cell clonality and proliferation. Conclusion Deltaretrovirus-associated leukemogenesis in sheep appears to be a two-hit process over time depending on the amounts of first horizontally and then vertically expanded viruses.