The genome of koala retrovirus (KoRV) has striking similarity to the gibbon ape leukemia virus (GALV) genome, suggesting the two viruses may share a common ancestor. Screening of DNA from a range of potential hosts of this putative ancestor virus revealed retroviral sequence from a grassland melomys (Melomys burtoni) that was closely related to sequence of both KoRV and GALV. This novel virus has been named Melomys burtoni retrovirus (MbRV). As grassland melomys and koalas share habitat, it is possible that there has been cross-species transmission of virus in the past. Although a causative relationship between KoRV infection and disease in koalas is yet to be confirmed, koala populations with a high prevalence of KoRV infection have a higher incidence of diseases characteristic of retroviruses (cancer and immunosuppression) than populations with low KoRV-prevalence. Not all KoRV-infected koalas develop clinical disease. This variation in disease expression may result from differences in proviral (DNA) insertion sites among koalas, genetic variability of KoRV in different individuals or from variation in host genetics.