Human foamy retrovirus (HFV) is found as two proviruses (HFV and delta HFV) which differ by a splice-induced deletion within the bel1 transactivator gene. The defective delta HFV (which lacks a functional Bel1 but harbors an intronless bet gene) is predominantly found in nonlytic infections in vitro as well as in vivo. Here, we show that infection of cell lines stably transduced by delta HFV DNA with the highly lytic HFV leads to chronic infections characterized by an absence of lysis, a balanced ratio of HFV to delta HFV, and a persistent Bet expression accompanied by a shutoff of structural genes. While this system only partially reflects the natural situation, in which target cells are infected by HFV and delta HFV simultaneously, it strongly suggests that delta HFV is a defective interfering retrovirus. Accordingly, previous or concomitant exposure to delta HFV viruses greatly enhances the formation of lysis-resistant clones in culture after HFV infection. The inability of delta HFV proviruses encoding a mutated bet gene to induce chronic infection suggests a role for Bet in this process. Through a specific, splice-induced, genomic deletion, resulting in a switch from Bel1 to Bet expression, the lytic properties of HFV are progressively lost. Such programmed inactivation of a key gene represents a new regulatory mechanism of gene expression in retroviruses.